http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/12/23/cccrisis123.xml



lets hope and pray it doesnt happen

12/24/2007 6:30:04 PM

I'm not overly concerned by this report. If you're really worried you can always do something like buy gold or put your money into something safe like say... a jar buried in the back yard.

[Edited on December 25, 2007 at 10:10 AM. Reason : asdf]

12/25/2007 10:04:15 AM

The situation is quite serious. If the Great Depression had not already happened it would be starting now.

Luckly, we have been studying this for the last 80 years and are pretty sure we know how to stop it now.

12/25/2007 11:59:47 AM

Oh, no doubt it's a serious issue, but I'm actually fairly confident that the next great depression won't happen as long as Alan Greenspan is alive.

12/25/2007 12:57:34 PM

save for the rainy day, spend on necessities

~merry christmas to all~

12/25/2007 1:14:21 PM

^^^ Yeah, it's called the Federal Reserve.

12/27/2007 1:48:54 AM

Clearly, very few of you actually bothered to read the factors behind the Great Depression.

High inflation possible.
Recession possible.
Depression, about as likely as me getting blown by Angelina Jolie.

12/27/2007 1:55:47 AM

^ Yes, and the Fed is often blamed for worsening--if not causing--the Great Depression. Today, though, the Fed does much to prevent a repeat of the event at issue.

Whether the Fed should exist or not is another question altogether.

12/27/2007 1:59:43 AM

Quote :

"Depression, about as likely as me getting blown by Angelina Jolie."

I am not familiar with your sexual prowess but if it is similar to the average wolf web male then I think it is significantly more likely that a depression type event is on deck than that you will be intimate with Angelina Jolie.

Now the fact that the Fed is recognizes the situation is why there will almost certainly not be a second depression but the makings of it are here.

I think the economics community has largely accepted that the Depression was caused by debt deflation in the United States. This lowered the collateral available for loans which reduced willingness to lend and led to a contraction in total credit.



As hooksaw pointed out, the Fed did not help matters by actually shrinking the money supply in response. In contrast the Fed is now poised to rapidly expand the money supply.

However, as Japan experience in the 90s demonstrated, it is not necessary that the central bank shrink the money supply to create a depression. The bursting of the Japanese asset bubble was enough even as the Bank of Japan sent overnight interest rates to zero.

This is one of my favorite charts to illustrate the seriousness of the problem



[Edited on December 27, 2007 at 12:27 PM. Reason : chart]

12/27/2007 12:18:33 PM