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Monday, April 9, 2012

Will There Be Another Great Depression?

      There are many things out there that preppers are getting prepared for. Local disasters such as tornadoes and wildfires, to larger disasters like EMPs, a super volcano eruption, or nuclear war. One of the most common things that people are prepping for however, is a financial collapse, or the next Great Depression. With the way the United States and the rest of the world is looking right now, many people are afraid that this is exactly what could happen. It is also one of the things that I am prepping for as well.

       On October 29th, 1929, a day that became known as Black Tuesday, the US stockmarket crashed. The news spread quickly to every country in the world and the effects of the crash followed. The Great Depression devestated nearly every country and lasted into the late 1930's or early 1940's. It is the deepest, longest and most wide spread depression of the twentieth century.

     A multitude of factors caused the Great Depression. Some will point to a demand driven theory with says that the Great Depression was caused by an economic bubble that collapsed due to neglect by bankers and industrialists or incompetence by the government. This led to a large scale loss of confidence that resulted in the reduction of consumption and investment. This resulted in the panic and subsequent crash.

     Then there are monetarists who beleive the Great Depression was like any other recession but policy mistakes by the Federal Reserve and other monetary authorities caused a shrinking of the money supply. This worsened the economic situation turning a recession into the Great Depression.
Whatever theory you beleive in, there were no doubts about what the results of the Great Depression were. Unemployment skyrocketed, up to 25% in the United States, and even higher in some other countries around the world. International trade significantly decreased. Crop prices also dropped, and the mining and logging industries were hit hard as well, as suddenly their products were no longer needed.



     Stratford Texas, 1935

     What helped worse the Great Depression in the United States was the Dust Bowl. Farmers had spread across the bread bowl of America and started cultivating the land in large areas. Land under cultivation tripled between 1925 and 1930. The farming techniques used allowed for erosion. Fields were left bare over winter months, which is when winds are at their highest, and the remains of plants were burned robbing the soil of nutrition and again leaving the ground open to erosion.

      When severe drought struck in the 1930's, the plain's native grass was gone, and there was nothing to hold the soil in place. Soil that had become brittle and dry was easily carried away by the winds, creating massive dust storms that rolled across the country. More than 500,000 were left homeless by the dust storms, and by 1940, 2.5 million people had moved out of the plains states.

       So the big question is, can it happen again? My answer to that question is yes. Of course it can happen again. We would much prefer that it didn't and many people will say that we have learned from history so of course it couldn't happen again.

      This is something I have been looking into for a few years now I have come to believe that we will find ourselves in another deep recession if not another Great Depression by 2030. There are a few things that have made me decide this.

     First is the pattern of recessions. Before the Great Depression there were a number of small recessions, closely spaced apart. They happened with only a few years in between them, but they were less severe. As the Great Depression grew closer, there was more time in between recessions but they started to become more severe in nature, until finally you had the Great Depression.

     Looking at the recessions during the twenty first century and into the the twenty first, there seems to be a very similar pattern happening. The collapse of the housing bubble would seem to be another pattern repeating it self as well. Another thing to keep in mind is that the dust bowl exacerbated the Great Depression in the United States. Will there be another drought like that in the Great Plains?

      There very well could be. The High Plains Aquifer, also known as the Ogallala Aquifer is one of the world's largest aquifers and sits under South Dakota, Nebraska, Wyoming, Colorado, Kansas, Oklahoma, New Mexico, and Texas. The aquifer is used for irrigation and for drinking water. However the aquifer is being depleted, as are river systems across the western United States. Meanwhile cities like Las Vegas continue to boom, and use excessive amounts of water in a place where there would usually be almost none.

     By next year (2013) 36 states are predicted to face water shortages. Water supply crises with the high probebility of conflict are being predicted to take place in the Western United States by 2025. No one is saying the Dust Bowl, but that sounds very much like a drought to me.

      So will there be another Great Depression? There is no specific answer for that, but I say that it is very likely. What can we do to prevent this? Probebly nothing. With the way resorces are being consumed and treated today, with little effort happening to change the rate of consumption, I think it is not very likely that we will avoid another situation like the Great Depression.

     We can however begin to prepare and to become more self reliant. We must learn new skills and brush up on old ones. Start a garden in your backyard, and learn to preserve the food that you get from it. Try out some DIY projects for survival prep. Read up on some history so you know what your preparing for. Make sure your bug in and bug out plans are up to date and ready. As long as we are prepared, when the next Great Depression comes, we will be ready to face it.

~Sara

I'm not the only one who thinks we're going to find ourselves in real trouble by 2030. MIT is thinking the same thing:
http://news.yahoo.com/blogs/sideshow/next-great-depression-mit-researchers-predict-global-economic-190352944.html

1 comment:

  1. Extra measures should really be taken to prevent another depression. A country must be handled by credible people to prevent another economic collapse. Life must be hard back then since people have no option to purchase an income protection cover to protect their assets.

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