Have the Last 5 Years Been Worse than the Great Depression?

What Do Economic Indicators Say?

We’ve repeatedly pointed out that there are many indicators which show that the last 5 years have been worse than the Great Depression of the 1930s, including:

• The housing slump

• The bank charge off rate

• The collapse in world trade

• The withdrawal of short-term credit

• The level of inequality between rich and poor (too much inequality destroys economies)

• The interconnectedness of financial systems and economies worldwide (interconnectedness leads to financial instability)

• Runaway spending and greed

Mark McHugh reports:

 Velocity of money is the  frequency with which a unit of money is spent on new goods and services.   It is a far better indicator of economic activity than GDP, consumer prices, the stock market, or sales of men’s underwear (which Greenspan was fond of ogling).  In a healthy economy, the same dollar is collected as payment and subsequently spent many times over.  In a depression, the velocity of money goes catatonic.  Velocity of money is calculated by simply dividing GDP by a given money supply.  This VoM chart using monetary base  should end any discussion of what ”this” is and whether or not anybody should be using the word “recovery” with a straight face:

 Velocity of money is the  frequency with which a unit of money is spent on new goods and services.   It is a far better indicator of economic activity than GDP, consumer prices, the stock market, or sales of men’s underwear (which Greenspan was fond of ogling).  In a healthy economy, the same dollar is collected as payment and subsequently spent many times over.  In a depression, the velocity of money goes catatonic.  Velocity of money is calculated by simply dividing GDP by a given money supply.  This VoM chart using monetary base  should end any discussion of what ”this” is and whether or not anybody should be using the word “recovery” with a straight face:



In just four short years, our “enlightened” policy-makers have slowed money velocity to depths never seen in the Great Depression.
(As we’ve previously explained, the Fed has intentionally squashed money multipliers and money velocity as a way to battle inflation. And see this)
Indeed, the number of Americans relying on government assistance to obtain basic food may be higher now that during the Great Depression.  The only reason we don’t see the “soup lines” like we did in the 30s only because of the massive food stamp program.
And while apologists for government and bank policy point to unemployment as being better than during the 1930s, even that claim is debatable.

What Do Economists Say?

Indeed,  many economists agree that this could be worse than the Great Depression, including:

• Fed Chairman Ben Bernanke

• Former Fed Chairman Alan Greenspan (and see this and this)

• Former Fed Chairman Paul Volcker

• Economics scholar and former Federal Reserve Governor Frederic Mishkin

• The head of the Bank of England Mervyn King (and see this)

• Nobel prize winning economist Joseph Stiglitz

• Nobel prize winning economist Paul Krugman

• Former Goldman Sachs chairman John Whitehead

• Economics professors Barry Eichengreen and and Kevin H. O’Rourke (updated here)

• Investment advisor, risk expert and “Black Swan” author Nassim Nicholas Taleb

• Well-known PhD economist Marc Faber

• Morgan Stanley’s UK equity strategist Graham Secker

• Former chief credit officer at Fannie Mae Edward J. Pinto

• Billionaire investor George Soros

• Senior British minister Ed Balls

http://www.zerohedge.com/contributed/2012-09-21/have-last-5-years-been-worse-great-depression

Twinsdads comments:

If you choose to look at this data, you have no choice but to stop blaming Bush, grow up and admit you're mad as hell and you're not going to take it anymore, and kick out the Democratic Senators that won't pass a budget or do jack shit to help the country and fire the current person in the White House.  Every Arab and every Muslim thanks his lucky stars that Obama is in the White House and that he and he alone pushed for the Arab Spring and he and he alone is responsible for the death of our Ambassador,  for NOT growing the economy, admit "The Stimulus" was stupid, wrong and massive failure and instead of campaigning he should resign in shame of what he has done to bring down a once powerful nation and turned it into a nation of beggars.