arlier today I stumbled upon this comment which says: “Our country is falling apart and the Chinese are taking over.”

This led me to some more reading about the Great Depression. Among the quotes that caught my eye:

“There were multiple causes for the first downturn in 1929, including the structural weaknesses and specific events that turned it into a major depression and the way in which the downturn spread from country to country.”

“Irving Fisher argued that the predominant factor leading to the Great Depression was overindebtedness and deflation. Fisher tied loose credit to over-indebtedness, which fueled speculation and asset bubbles.”

Got that? “Asset bubbles.” A little like “credit”, which is a nicer word for “debt”. It’s also a bit like patents, which are a monopoly on imaginary things that don’t really exist (except in people’s minds). They’re worthless and China hardly gives a damn about these. China is right in this case, but it has got its own monopolies (and standards) that may lead to an avalanche of lawsuits, according to The Economist.

Going back to the Wikipedia article, it also states: “After the panic of 1929, and during the first 10 months of 1930, 744 US banks failed. (In all, 9,000 banks failed during the 1930s). [...] In their view, the key cause of the Depression was the expansion of the money supply in the 1920s that led to an unsustainable credit-driven boom.”

The more I read it, the more similar it seems to what happens at the moment (but only the early stages). It hopefully won’t lead to a world war 10 years down the lines as it did back then (through rise of extreme regimes) because these days the Chinese have nukes too. Hydrogen bombs make world wars far more lethal and although it seems far fetched, the current depression (yes, using the “D” word is sensible as this is no recession anymore) is only at its dawn. Several decades ago in Europe (around the time of the cold war), scientists like Einstein and others warned that the survival of the human species is at stake. There was almost a nuclear strike, but it was avoided at the end. So, I’m beginning to believe that global warning is a secondary issue, although recent reports suggest that nuclear weapons too would have a devastating effect on the atmosphere.

It’s s tricky situation at the moment. Those who have no money (or are in debt) are suffering and those with money are not guaranteed to get it back from the banks, which are collapsing. Not only have people lost a lot of money, but whatever remains is at risk too. According to Wikipedia, the economy sank by almost two thirds, depending on how one measures it. It took well over 10 years to reach recovery, depending on the nation (this varied).

Many years of greed and corruption are taking their toll now. We may be paying the price for decades of so-called “free market”, where the word “free” means that people are free to do whatever they want, even engage in white-collar crime. Maybe it’s human nature and thus not preventable. Regulators were asleep on the wheel and it shows. Culture deteriorated. Now comes the usual cycle of so-called “socialsm”, where poor people are paying to rescue the rich from their own recklessness and endless pursuit to gain greater control.

We live in interesting times. We also live in dangerous times. And with these words, I wish a tolerable 2009 to everyone.