Kate "Short Fuse" Incontrera of The Daily Reckoning on The Next Great Depression

Tuesday, Apr 25, 2006

We asked you this week, dear reader: What will the next Great Depression bring? How will Americans survive in our day-to-day lives? The responses to this not-so-hypothetical query continue to clog up our inbox, which doesn't surprise us. What does surprise us, however, is how united our readers are on this subject. Not one message lamented on how strong our economy is right now, and how we are fools for even bringing up the possibility of another Great Depression. Each e-mail portrayed how
real this idea is to Americans - that something this bad could be right around the corner.
"A Great Depression signals a swerve in global direction, a massive transformation of the world society and economy," says echolist.com.
"One great system perishes. The Great Depression marked a critical stage in a transformation of the global economy that began around 1900. That's when the Industrial Economy of the 19th century slowly and fitfully began to morph into the 20th century's Consumer Economy. To tame the almost naked continent of 1845, the Industrial Economy required immense savings. To save and invest became the 11th Commandment. Imagine. Americans saved up to 40 percent of their income!"
Apparently, we learned nothing from the events that occurred over seventy years ago. The U.S. savings rate has fallen into the negative level for the first time since the Great Depression. Debt, consumer and national, is skyrocketing. We continue to see people dig themselves deeper and deeper into debt, with no regard for preparing for the future.
"Having parents who lived through the First Depression (during the late 1920s-1930s), and having a father-in-law who was the proverbial 'packrat' (among other things, 7 washing machines, 15 vacuum cleaners, etc., when we cleaned out his house) they all had the mentality that nothing was wasted;
everything had value; and that what they had was of good quality," writes one Daily Reckoning reader.
"Today we have very little of this. We do not know how to fix anything, build anything, or save anything of quality (because what little we have is made to expire and be thrown away).
"I personally can not imagine what it will be like when our dollar is worthless, and the shelves at the stores display a few dented cans of beans that are selling for whatever the price of an ounce of silver (or gold for that matter) is worth.
"Who among us will be able to keep the lights on, the water running, and our cars tuned?! What jobs will pay the best? For that matter, what jobs will be available for any of us? And what about our children? How will we care, feed, and educate them?
"I am half-empty kinda of person, but what I see ahead for the USA scares me very much (especially since it will stretch into my elder years of
life). It is going to be a very hand-to-mouth existence, with a lot of sadness, anger, and senseless violence (over simple everyday commodities)."
Short Fuse - The Daily Reckoning.
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