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The Next Great Depression?

September 30, 2022

By Paul Homewood

 

Food for thought:

 

 

 

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The Western world today faces a serious risk of slipping into another Great Depression. This risk has arisen not because of a poor budget drawn up by a blundering government — or even due to some nefarious speculation taking place in financial markets. Rather, it has arisen due to global economic relations deteriorating to the point of all out warfare. To understand why this is provoking a risk of depression, we must reach back into the annals of history to recall what cursed the world in the 1930s.

Full story here.

25 Comments
  1. September 30, 2022 4:52 pm

    Energy is the foundation of both global trade and global prosperity. Both are exponentially greater than 100 years ago. The recent attacks on trade and energy are primarily political theatrics for a secular world that elevates politics to the sacred.

    Let’s just say that political constituency for a collapse of trade and prosperity is so small, political forces will manage to keep the ship afloat.

    Global economic collapse will be related to energy but it comes from the sun, not politics. A Coronal Mass Ejection (CME) trillions of tons of energized particles, plasma waves, induced into conductors by earth’s magnetosphere will melt down literally all the transformers. In short, when nothing works, everyone suffers. Imagine your own dependency on the electrical grid. CMEs of this magnitude have happened regular throughout history. We have written records of the tropical Auroras and C14 spikes which correlate in the dendrochronological record (tree rings). They will happen again. Politics will have nothing to do with it.

    • Orde Solomons permalink
      September 30, 2022 8:33 pm

      The First W W wiped out a third of the Country’s wealth. Not a good start for the 1920s for one thing.

      • October 1, 2022 8:09 pm

        Scale, the economies of scale, is where the profound vulnerability comes from. For example: the distribution of milk used to mean the distribution of milk cows. It is efficient to concentrate the milk cows and use electricity to milk, pasturize, process, refrigerate and distribute it. But the system can’t provide anyone milk if the grid collapses. 1921, 1989, 2012, three weeks ago, solar flares of great magnitude have been observed in the last 100 years. We have a constant stream of lightning events showing us the distructive nature of induced plasma currents.

        The changes in economic life that are so enriching and beneficial to mankind all depend on the global electrical grid. If it collapses all in one day? There will be no road back to how we used to live – the road forward will be clogged with corpses.

      • Robert Christopher permalink
        October 1, 2022 10:07 pm

        Many young men were killed in WWI, so the dynamism of Europe was diminished, along with the number of fathers, and their offspring.

    • Stuart Hamish permalink
      October 1, 2022 8:21 am

      The May ,1921 solar flares sparked fires , frazzled telegraph stations circuit boards across the globe and may have disrupted the worlds weather systems – spurring drought , intense heatwaves and unusually warm western Arctic temperatures – but the storms did not precipitate the Great Depression ….Of course our civilization was not as connected to or dependent on electricity grids and electronic technologies back then . I have studied the 993 CE and 774 CE ‘Charlemagne event CME phenomena ..As radionucleotide anchors they have revolutionized ice core and dendrochronological dating

      • October 1, 2022 8:08 pm

        Scale, the economies of scale, is where the profound vulnerability comes from. For example: the distribution of milk used to mean the distribution of milk cows. It is efficient to concentrate the milk cows and use electricity to milk, pasturize, process, refrigerate and distribute it. But the system can’t provide anyone milk if the grid collapses. 1921, 1989, 2012, three weeks ago, solar flares of great magnitude have been observed in the last 100 years. We have a constant stream of lightning events showing us the distructive nature of induced plasma currents.

        The changes in economic life that are so enriching and beneficial to mankind all depend on the global electrical grid. If it collapses all in one day? There will be no road back to how we used to live – the road forward will be clogged with corpses.

  2. September 30, 2022 4:56 pm

    It’s an interesting article. But! As with most articles that aspire to review the Great Depression it focuses almost exclusively on “policies” “debt” and the rest of the levers of power.

    I have yet to read (and I am not claiming that I have done an exhaustive search) a seminal financial work that examines the enormous financial cost of wiping out a large portion of the demographic that would have been coming into the prime of their productive years in the mid nineteen-twenties. The leadership of companies, the skilled workers, the craftsmen, the apprentices the volunteers in the first two years of war in France and England – and yes, Germany – bore the brunt of the casualties. What was the cost of having that demographic decimated in the three biggest European countries when recovery came around?

    I think the price was much, much higher than has been reckoned.

    And that is the huge difference between then and now.

    People solve things, it’s what we do. We get things wrong and then we set about getting it right but mankind keeps moving on. We thankfully, do not have a Great War devastating and skewing our demographics. We will sort it out. The one thing that can be guaranteed to feck it up are cnetralized authoritarian governments imposing approved solutions.

    • It doesn't add up... permalink
      September 30, 2022 6:20 pm

      We do of course have other forces altering our demography, starting with the birth deficit due to contraception, abortion, decline of family stability etc. leading to a big notch in our home grown population in younger cohorts that has a similar effect. Hence the large increase in immigration.

    • Ben Vorlich permalink
      September 30, 2022 8:10 pm

      Compounding the war deaths Spanish Flu mainly affected the young. There were also lockdowns, not the all embracing ones of Covid lockdown, but schools, theatres and so on.
      The current situation has put me in mind of WW1 as a series of bad situations coming one after another just as you’re getting out of the last.

    • Phoenix44 permalink
      October 1, 2022 9:51 am

      It’s an interesting point but it doesn’t cause a depression. As economists like to point out, an economy only changes if something changes. In other words, economies are inherently stable. Inflation for example never just appears. Unfortunately much of the history of the 1930s has been colonised by the Left partly in order to justify FDR’s massive interventionist. Keynes offers some alternative but he is pretty discredited now. As with every economic collapse, I would start with government and then continue with government. It’s very difficult to collapse an economy if you pursue free trade, free markets and low regulation/intervention.

  3. September 30, 2022 5:52 pm

    We need to make much more in the Uk and thereby cut our horrifying import bill. That includes Energy, the growing of food, the manufacture of electronic chips and many other items

    Key amongst them are energy and food. As we seem determined to carpet bomb the countryside with solar panels, wind turbines, forests, rewilding, houses and roads its difficult to see where the food will be grown

    • Jordan permalink
      September 30, 2022 10:01 pm

      We can grow cows, sheep and wildfowl on boggy land and steeper/rugged slopes in highland areas. These areas of land are unsuitable for arable crops. This is overlooked by the lentil munchers and climate bedwetters as they try to argue that eating meat is harmful to the environment.

    • Chaswarnertoo permalink
      October 1, 2022 9:07 am

      We are heavily overpopulated. Last in, first out.

    • Phoenix44 permalink
      October 1, 2022 9:53 am

      Why is our import bill “horrifying”? And its not a “bill”. We produce far more than we used to. What it is we produce doesn’t matter provided people value it. This is economics.

      • October 1, 2022 12:52 pm

        Phoenix

        I am afraid I believe in the Micawber principle. Due to very low interest rates we have sucked in a lot of imported goods especially at the luxury end, with such a big difference between our exports and imports the difference has to be covered by debt or investment.

        Thats all very well, but when interest rates rise, that has an even more detrimental effect. i have been offered paltry interest rates over the last 10 years so this merry go round of profligacy of imported goods can continue.

        for the sake of national security we need to stem the imbalance in trade and need to grow more of our own food, have more of our own energy, provide more of the essentials of life such as drugs. there are of course many things we can’t make and need to be imported.

    • Dave Andrews permalink
      October 1, 2022 5:05 pm

      Industrial demand for electricity has fallen 20% since 2000 in the UK. Some down to improved management of electricity usage but most to outsourcing of industry to China. We,like US and EU, have exported our emissions to China.

      • October 1, 2022 5:38 pm

        Dave

        I agree. In exporting our industry we have also of course exported our jobs and technology and the innovation that went with them.

  4. Realist permalink
    September 30, 2022 7:33 pm

    European politicians seem to be deliberately attempting to wreck economies with their “climate” obsession in general, attacks on power generation and transport in particular, not to mention the invented bans, regulations and taxes on other things that even they can’t make a link to “climate” for.

    • Jordan permalink
      September 30, 2022 10:07 pm

      I noticed the following comment in the linked article: “due to the mounting costs — especially energy costs — that are being borne due to the war in Ukraine”.
      Ukraine has exacerbated a situation of our own making = over-dependence on intermittent sources of energy, and over-dependence on gas for balancing intermittency.
      With a more balanced mix of primary fuels for balancing, we would have much been better placed to weather the storm. This doesn’t suggest we could have been free from price spikes, but to have a meaningful option of switching to flexible coal-fired generation in our energy mix is a luxury we can only dream of today.

      • October 1, 2022 9:07 am

        Didn’t a certain D Trump say something similar about coal and get scorned as usual?

    • Phoenix44 permalink
      October 1, 2022 9:56 am

      Assume each regulation over the past 30 years has added 0.1% to the cost of everything and reduced growth by 0.01%. Now estimate how many regulations we have had and compound all of that. Our economy has been slowly stifled and strangled until every innovation and advance is cancelled out.

      • October 1, 2022 12:54 pm

        Phoenix

        Yes, life has become extremely complex these days with every new rule seeming to need another to support it. i seem to remember those in govt declaring they will have a bonfire of unnecessary rules and regulations but invariably they produce even more.

      • Realist permalink
        October 1, 2022 1:38 pm

        There needs to be a law that at least five existing regulations get scrapped / repealed before they even think about adding a new one.

  5. Harry Passfield permalink
    September 30, 2022 7:33 pm

    Thing is…once the WEF/OWG get their way by killing off the route to abundant energy (not to mention the depletion of the world’s population as the likes of Attenborough etc desire) what will they do with the world they inherit – bearing in mind that the likes of Soros and Schwabe etc will be long gone?

  6. John Culhane permalink
    October 1, 2022 7:42 pm

    The politicians combined with the business people pushing ESG have been living in a green energy bubble for so long that that they can cannot see reality and have come to believe their own propaganda. Their own stupidity and egos mean they don’t know they are in a bubble. The collapse of Germany and Britain due to fallout from the lack of energy will reshape the EU. They can inflate the money supply and increase the debt, they cannot print gas molecules or uranium ore, they have to abandon the illusion they can run a modern society on random energy generation dictated by the weather and diurnal cycle.

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