May 22, 2022
Some call the current crisis “The Next Great Depression” or “The Greater Depression,” but the truth is that things have gone so wrong this time that the 1930s crisis may no longer be a point of reference.
The circumstances were vastly different back then, and the proportions of The Depression Of The Twenty-First Century are so vast that it is likely to become a point of reference in and of itself – an event of such singular conditions that will be used as a comparison in future financial and economic meltdowns.
Many questions remain unanswered because we are still in the midst of the crisis. We don’t know how long it will last or how bad it will get; we can’t even predict our chances of recovery with any certainty because each week has been decisive so far.
As a result, today we will examine how the current economic collapse differs from the Great Depression of the 1930s, and in what ways they may have similar outcomes.
We have grown accustomed to being cared for as a society, and this generation has little experience or memory of hardship. Part of this coddled behaviour stems from a paternalistic state, with which we have developed such a strong co-dependency that we now let the state make the difficult decisions we don’t want to deal with.
The state offers very appealing guarantees to investors and consumers, and they want to see proof of those guarantees, hoping it isn’t just a hollow promise.
Alternatively, in this century, the “lax” attitude toward stock market selloffs is the result of the assumption that the market will be fixed and rebound as soon as possible.
Alternatively, if things become too serious, the Federal Reserve will always come to the rescue. The assumption that the Fed will always be there to bail out banks and financial markets has led to investors becoming increasingly reckless. Some of these people appear to be quite pleased with themselves because they purchased stocks this spring and are now reaping the benefits of the Fed’s liquidity injections into the financial markets.
We appear to have a short memory when it comes to remembering how difficult it was to escape a similar chaos a little more than a decade ago.
Although the financial markets appear to have recovered more quickly this time, the economic backdrop against which they are based is collapsing by the day. But don’t think the Fed isn’t aware that everything is about to collapse at any moment, because they are well aware of how dangerous the situation has become.
They have already pulled out all the stops in their quest to “restore inflation,” but they face an uphill battle. Every financial system crash injures it even more, and it never fully recovers; it is simply dragged along.
As Kelsey Williams described in his piece “A Depression for the Twenty-First Century,” the economic collapse has many complex components that have yet to cause major turbulence in our society, and while Wall Street projections for a rebound are optimistic, the real economy is not.
Or, as she put it, “we are currently in poor financial health, and before we can get better, we will face a healing crisis of enormous proportions.”
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