Shhhh…It’s Even Worse Than The Great Depression

[DA60]

...'In just four short years, our “enlightened” policy-makers have slowed money velocity to depths never seen in the Great Depression. Hard to believe, but the guy who made a career out of Monday-morning quarterbacking the Great Depression has already proven himself a bigger idiot than all of his predecessors (and in less than half the time!!). During the Great Depression, monetary base was expanded in response to slowing economic activity, in other words it was reactive (here’s a graph) . They waited until the forest was ablaze before breaking out the hoses, and for that they’ve been rightly criticized. Our “proactive” Fed elected to hose down a forest that wasn’t actually on fire, with gasoline, and the results speak for themselves. With the IMF recently lowering its 2012 US GDP growth forecast to 2%, while the monetary base is expanding at about a 5% clip, know that velocity of money is grinding lower every time you breathe.'

http://acrossthestreetnet.files.wordpress.com/2012/08/velocity.png

Guest Post: Shhhh

 

[Dittohead not!]

and yet, when you go into a store or a mall, you see people there shopping and spending money. Get on the freeway, and there are zillions of cars sharing the road, mostly newer models, all burning gas and taking their owners somewhere. Go into a grocery store, and you see food from all over the world in astounding abundance and great variety.

That isn't how my parents described the great depression, not at all. Rice for breakfast, beans for lunch, and leftovers for dinner, is how my father (born in 1918) described it. American citizens were willing to work in the fields in order to put food on the table. There was no illegal alien problem then.

Read "Grapes of Wrath", and you get a picture of a time that was vastly different from t he times we're living in right now.

The current recession is not the great depression, not even close. People are just spoiled.

 

[sawyerloggingon]

and yet, when you go into a store or a mall, you see people there shopping and spending money. Get on the freeway, and there are zillions of cars sharing the road, mostly newer models, all burning gas and taking their owners somewhere. Go into a grocery store, and you see food from all over the world in astounding abundance and great variety.

That isn't how my parents described the great depression, not at all. Rice for breakfast, beans for lunch, and leftovers for dinner, is how my father (born in 1918) described it. American citizens were willing to work in the fields in order to put food on the table. There was no illegal alien problem then.

Read "Grapes of Wrath", and you get a picture of a time that was vastly different from t he times we're living in right now.

The current recession is not the great depression, not even close. People are just spoiled.

It's the people you don't see in the stores and malls and on the freeways. With a real unemployment rate in the teens theres alot of them but that also means 80% or more are still employed so when you see them out and about it creates an optical illusion of sorts. It's alot like you don't see many people with Parkinson's stumbling down the sidewalk, that doesn't mean they don't exist.

 

[MaggieD]

and yet, when you go into a store or a mall, you see people there shopping and spending money. Get on the freeway, and there are zillions of cars sharing the road, mostly newer models, all burning gas and taking their owners somewhere. Go into a grocery store, and you see food from all over the world in astounding abundance and great variety.

That isn't how my parents described the great depression, not at all. Rice for breakfast, beans for lunch, and leftovers for dinner, is how my father (born in 1918) described it. American citizens were willing to work in the fields in order to put food on the table. There was no illegal alien problem then.

Read "Grapes of Wrath", and you get a picture of a time that was vastly different from t he times we're living in right now.

The current recession is not the great depression, not even close. People are just spoiled.

Lines for free food to eat . . . lines for jobs . . . lines for loaves of bread.

What we're going through right now is nothing compared to the Great Depression.

 

[imagep]

It's the people you don't see in the stores and malls and on the freeways. With a real unemployment rate in the teens theres alot of them but that also means 80% or more are still employed so when you see them out and about it creates an optical illusion of sorts. It's alot like you don't see many people with Parkinson's stumbling down the sidewalk, that doesn't mean they don't exist.

My best guess is that we probably have a larger percent of citizens employed now than during the Great Depression due to the two income family being so common these days. My father grew up during the great depression, his mother never worked a single day outside the home. My mother, worked from the time that I entered grade school until she turned 63, and my wife works ever day, literally only taking one week off for childbirth and two days off when she broker her arm and leg (at the same time).

The unemployment rate really doesn't matter that much, what matters is that every family has at least one income earner. I wish that they would stop reporting the unemployment rate, and start reporting the employment rate (states as a percent of people between the ages of 18 and 65 who have jobs).

 

[Dittohead not!]

It's the people you don't see in the stores and malls and on the freeways. With a real unemployment rate in the teens theres alot of them but that also means 80% or more are still employed so when you see them out and about it creates an optical illusion of sorts. It's alot like you don't see many people with Parkinson's stumbling down the sidewalk, that doesn't mean they don't exist.

Oh, I get that there are problems, jobs are hard to find, people are having trouble paying their bills.

But, comparing this recession to the great depression is like comparing a snow flurry to a major blizzard in which it is snowing sidewise and temperatures are cold enough that your brass monkey is no longer anatomically correct. Check out Maggie's pictures. If you know someone who is old enough, ask them what the great depression was like.

 

[imagep]

View attachment 67132823View attachment 67132824View attachment 67132825

Lines for free food to eat . . . lines for jobs . . . lines for loaves of bread.

What we're going through right now is nothing compared to the Great Depression.

Well just look at all of those welfare slackers just looking for a handout.

 

[sawyerloggingon]

Oh, I get that there are problems, jobs are hard to find, people are having trouble paying their bills.

But, comparing this recession to the great depression is like comparing a snow flurry to a major blizzard in which it is snowing sidewise and temperatures are cold enough that your brass monkey is no longer anatomically correct. Check out Maggie's pictures. If you know someone who is old enough, ask them what the great depression was like.

I agree it's no great depression, just saying it's worse than it looks because social programs now let people stay home and get a check. In the depression you saw the unemployed people in soup lines, riding the rails etc. They were visible.

 

[Dittohead not!]

I agree it's no great depression, just saying it's worse than it looks because social programs now let people stay home and get a check. In the depression you saw the unemployed people in soup lines, riding the rails etc. They were visible.

There you do have a point. There are a lot of desperate people whose unemployment benefits are about to run out, and you don't see them in soup lines. Still, this is not the great depression.

I went to a restaurant once with my dad. He said that they gave him too many french fries.

"Don't eat them all," I reply.

"Oh, no, if you grew up in the great depression, you don't waste food."

People have plenty of food in the USA today. No one is worried about wasting a few french fries.

 

[sawyerloggingon]

Oh, I get that there are problems, jobs are hard to find, people are having trouble paying their bills.

But, comparing this recession to the great depression is like comparing a snow flurry to a major blizzard in which it is snowing sidewise and temperatures are cold enough that your brass monkey is no longer anatomically correct. Check out Maggie's pictures. If you know someone who is old enough, ask them what the great depression was like.

If you compare unemployment now to the great depression it is about the same really, our real rate now is in the low teens. The highest official rate in the depression was 19% and I am just guessing here but I bet that was an accurate number then unlike now and all these tricks to lower the official rate.


Unemployment During the Great Depression

Average rate of unemployment
in 1929: 3.2%
in 1930: 8.9%
in 1931: 16.3%
in 1932: 24.1%
in 1933: 24.9%
in 1934: 21.7%
in 1935: 20.1%
in 1936: 16.9%
in 1937: 14.3%
in 1938: 19.0%
in 1939: 17.2%3

EDIT.. OOOPS, make that 24%, my one good eyes acting up, LMAO

 

[sawyerloggingon]

There you do have a point. There are a lot of desperate people whose unemployment benefits are about to run out, and you don't see them in soup lines. Still, this is not the great depression.

I went to a restaurant once with my dad. He said that they gave him too many french fries.

"Don't eat them all," I reply.

"Oh, no, if you grew up in the great depression, you don't waste food."

People have plenty of food in the USA today. No one is worried about wasting a few french fries.

LOL, my dad inspected every chicken bone, if it wasn't clean as a whistle he put it back on our plate.

 

[Dittohead not!]

LOL, my dad inspected every chicken bone, if it wasn't clean as a whistle he put it back on our plate.

Yep. Children of the great depression did not waste food, and tried to teach their children the same.

Today, we have plenty of food. There are a lot of people out of work, to be sure, but people are living much better than they did in the 1930s.

 

[DA60]

and yet, when you go into a store or a mall, you see people there shopping and spending money. Get on the freeway, and there are zillions of cars sharing the road, mostly newer models, all burning gas and taking their owners somewhere. Go into a grocery store, and you see food from all over the world in astounding abundance and great variety.

That isn't how my parents described the great depression, not at all. Rice for breakfast, beans for lunch, and leftovers for dinner, is how my father (born in 1918) described it. American citizens were willing to work in the fields in order to put food on the table. There was no illegal alien problem then.

Read "Grapes of Wrath", and you get a picture of a time that was vastly different from t he times we're living in right now.

The current recession is not the great depression, not even close. People are just spoiled.

I am not sure why you are saying that times were worse in the Great Depression then now...of course they were.

You do realize that the article is saying that the velocity of money is worse then the Great Depression...hence the link to the graph...not that Americans have it worse now then during the Great Depression?

 

[Goshin]

It’s Even Worse Than The Great Depression

I'd have to call that an exaggeration of substantial proportions.

My parents were Depression-era farm kids, born in the 1920's. They grew up during the 30's and 40's, and I heard many stories from them about what it was like for them, and things they heard about what others were going through.

It's fairly bad right now, yes.... but not Depression-era bad. There were literally small armies of homeless people wandering, looking for a dry place to sleep and a mouthful of food to keep them going. There are stories of mothers who had to pick which of three children they'd let starve to death so they could feed the other two enough to keep them alive.

The Depression was in a class by itself.... so far, at least. If things get that bad, there won't be any question about it... EVERYONE will KNOW we're there.

 

[DA60]

I'd have to call that an exaggeration of substantial proportions.

My parents were Depression-era farm kids, born in the 1920's. They grew up during the 30's and 40's, and I heard many stories from them about what it was like for them, and things they heard about what others were going through.

It's fairly bad right now, yes.... but not Depression-era bad. There were literally small armies of homeless people wandering, looking for a dry place to sleep and a mouthful of food to keep them going. There are stories of mothers who had to pick which of three children they'd let starve to death so they could feed the other two enough to keep them alive.

The Depression was in a class by itself.... so far, at least. If things get that bad, there won't be any question about it... EVERYONE will KNOW we're there.

The article is about THE VELOCITY OF MONEY AND THAT THE OVERALL ECONOMIC OUTLOOK IS WORSE NOW THEN THE GREAT DEPRESSION.

Not that the present state of America OR that life for the average American is worse then during the Great Depression.



BTW - if you take away food stamps, Medicaid and Medicare and all the other social safety nets that were not in place during the first few years of the Great Depression, then I bet you things in America would not be that much better then they were back then.

Not that I am a fan of gigantic size of the safety nets - I am not.

But I am an advocate of some safety nets...which were not in place during the early 1930's.

 

[Goshin]

The article is about THE VELOCITY OF MONEY AND THE OVERALL ECONOMIC OUTLOOK IS WORSE NOW THEN THE GREAT DEPRESSION.

Not that the present state of America is worse then the great Depression.


No offense, but I can see from now on I have to assume that everyone will not bother to read a posted article and just derive most everything simply from the title.


BTW - if you take away food stamps, Medicaid and Medicare and all the other social safety nets that were not in place during the first few years of the Great Depression, then I bet you things in America would not be that much better then they were back then.

Not that I am a fan of gigantic size of the safety nets - I am not.

But I an advocate of some safety nets.

People post a lot of stuff. Most of it isn't worth reading. I read stuff posted by people I've known a while whose judgement I tend to trust due to postive experiences with same, and if the subject interests me.

Okay, velocity of money and overall economic outlook... the subject title didn't say that though, which makes it slightly deceptive.

 

[DA60]

People post a lot of stuff. Most of it isn't worth reading. I read stuff posted by people I've known a while whose judgement I tend to trust due to postive experiences with same, and if the subject interests me.

Okay, velocity of money and overall economic outlook... the subject title didn't say that though, which makes it slightly deceptive.

I agree - it is slightly deceptive. I assume the author was going for the shock effect.

And I am not saying I have not done it myself (judged the book by it's cover).

In the future, when I post an article, I shall try to take that into account and save everyone some hassle.

 

[johnny_rebson]

View attachment 67132823View attachment 67132824View attachment 67132825

Lines for free food to eat . . . lines for jobs . . . lines for loaves of bread.

What we're going through right now is nothing compared to the Great Depression.

If we could get lines like that again, we could weaken the unions and get blue collar wages back down where they should be.

 

[MaggieD]

If we could get lines like that again, we could weaken the unions and get blue collar wages back down where they should be.

And where should they be, Johnny? Not that I don't think the UAW's $76.00 (with benefits) for building cars makes on twiddle of sense, but unions represent only 15% of the workforce, if that. I don't think $9.25/hour for picking vegetables in farm fields can afford to go much lower....you?

 

[Goshin]

If we could get lines like that again, we could weaken the unions and get blue collar wages back down where they should be.

Holy hannah bud, around here blue collar jobs already pay only $7.50 to maybe as much as $12/hr. What do you want??

I'll grant you stuff like the UAW gets crazy, but most of the country's blue collar working men don't make that kind of money.

 

[mbig]

This discussion sounds very familiar.
And this one may also backfire.

http://www.debatepolitics.com/economics/120987-money-velocity-new-low-worrisome-4.html

Well let me see...
There is a recovery in corporate profits without dispute. Sitting on record cash hoards.
employment/unemployment, so-so.

Of course, Many people in the bottom half are still deleveraging/paying down debt, and as seen in Many strings here, the top 10%/1%/1/10th% are getting 90% of the recovery wealth.

So of course 'velocity' suffers when the top few percent are just piling the money into already fat bank accounts and don't spend it as they already buy what the need easily. While the bottom half have no more money.

Sorry Oldreliable67, you have but confirmed a Fact that's probably not to your liking.

 

[Cardinal Fang]

Tyler Durden...zerohedge...major whackjob alert.

A couple of other phony things that are floating around...

There are no tricks at all employed in the monthly unemployment numbers.

The supposed $76 an hour number included health benefits for retired auto workers as if they were being paid to current workers.

 

[Moot]

...'In just four short years, our “enlightened” policy-makers have slowed money velocity to depths never seen in the Great Depression. Hard to believe, but the guy who made a career out of Monday-morning quarterbacking the Great Depression has already proven himself a bigger idiot than all of his predecessors (and in less than half the time!!). During the Great Depression, monetary base was expanded in response to slowing economic activity, in other words it was reactive (here’s a graph) . They waited until the forest was ablaze before breaking out the hoses, and for that they’ve been rightly criticized. Our “proactive” Fed elected to hose down a forest that wasn’t actually on fire, with gasoline, and the results speak for themselves. With the IMF recently lowering its 2012 US GDP growth forecast to 2%, while the monetary base is expanding at about a 5% clip, know that velocity of money is grinding lower every time you breathe.'

http://acrossthestreetnet.files.wordpress.com/2012/08/velocity.png

Guest Post: Shhhh

Some would argue that the Federal Reserve contracted the money supply instead of expanding it and that is what turned an ordinary recession into a Great Depression and there is plenty of evidence to support that theory and even Bernake admits as much. So I don't know which school of thought the author of the article is coming from when he says, "during the Great Depression, monetary base was expanded in response to slowing economic activity, in other words it was reactive" but it's not any that I am familiar with nor is it accurate. Because the Feds didn't expand the money supply they contracted it and combined with the Smoot Hartley Tariff act and a severe drought the economy went into a deflationary spiral.

In response to the 2008 economic crisis the Feds couldn't lower interest rates any lower so they came up with a scheme called quantive easing that was meant to put more liquidity into the economy by freeing up the credit market and trillions in capital held by the banks. But it didn't quite work so the Feds did another round of quantive easing in 2010 and it has shown to be somewhat effective because the economy is moving up, but at a very slow pace. So now there is speculation that the Feds might do QE3 but that will all depend on if the economy takes a down turn or stagnates which it doesn't appear to be doing right now. So as long as the economy is on the uptick and inflation is under control don't expect the Feds to do very much.

Sorry, but that article seems highly misinformed if not outright wrong in oh so many ways.

 

[washunut]

Some would argue that the Federal Reserve contracted the money supply instead of expanding it and that is what turned an ordinary recession into a Great Depression and there is plenty of evidence to support that theory and even Bernake admits as much. So I don't know which school of thought the author of the article is coming from when he says, "during the Great Depression, monetary base was expanded in response to slowing economic activity, in other words it was reactive" but it's not any that I am familiar with nor is it accurate. Because the Feds didn't expand the money supply they contracted it and combined with the Smoot Hartley Tariff act and a severe drought the economy went into a deflationary spiral.

In response to the 2008 economic crisis the Feds couldn't lower interest rates any lower so they came up with a scheme called quantive easing that was meant to put more liquidity into the economy by freeing up the credit market and trillions in capital held by the banks. But it didn't quite work so the Feds did another round of quantive easing in 2010 and it has shown to be somewhat effective because the economy is moving up, but at a very slow pace. So now there is speculation that the Feds might do QE3 but that will all depend on if the economy takes a down turn or stagnates which it doesn't appear to be doing right now. So as long as the economy is on the uptick and inflation is under control don't expect the Feds to do very much.

Sorry, but that article seems highly misinformed if not outright wrong in oh so many ways.

Most people would agree that QE1 was needed and helped fill a liquidity problem. Many seem to think that QE2 and "operation twist" have had much if any positive effect. It has allowed the government to keep running high levels of deficit without raising interest rates as they bought much of the new supply of treasuries. However it did not lead to real growth in the economy as evidenced by the approximately 1.5 trillion in excess bank reserves being held at the Fed. Not sure what the benefits of QE3 would be except to raise stock prices.

 

[Henrin]

That isn't how my parents described the great depression, not at all. Rice for breakfast, beans for lunch, and leftovers for dinner, is how my father (born in 1918) described it. American citizens were willing to work in the fields in order to put food on the table. There was no illegal alien problem then.

Did you forget about the burning of food and killing of cattle by FDR that PUT people in bread lines? I think you did. There was no freaking food because it was all being ****ing burned!