Will we eventually go through an economic depression similar to the Great Depression?

Question

if our gov't does not do N E thing about it?

i have heard about the bank runs, i know that's what people did before the Great Deppression started on Black Tuesday.

Answer 1

It soooooooooooooooooooooooooo ...... appears, you are sooooooooooooooooooooooooooooooooooooooo... right and that you really are!

Answer 2

If we do have a recession it will not resemible the 20's and 30's.  there are too many regulations in place to halt a depression from starting. taking money out of the bank is not the anwser to saving the economy. monetary policy and fiscal policy will save the economy from falling too far. gas prices will come down as soon as the speculators make their profits. already the oil prices have come down. Yesterday crude went down. when people start using gas to go on joy rides, demand will come down for gas and so will prices. We will never see gas under $2 again but it will be under $3  DON'T PANIC.it will be OK

Answer 3

It's possible, but unlikely.

Right now, Fannie Mae and Freddie Mac are two GSEs (Government Sponsored Entities) that are losing tremendous value and contain mortgages totalling about 5 trillion dollars---mortgages that many people are unable or unwilling to pay. Freddie Mac and Fannie Mae are still corporations like any other and that is serving to be a difficult problem, because it's bad media, bad for the value of the dollar, bad for homeowners, etc if the government provides support to pull them out of this mess. However, if the government does not pull them out of this mess, trillions of dollars worth of American debt will go sour and wreak havoc on the financial system.

As for the bank runs, we won't see any bank runs like we saw before the Great Depression. The FDIC has been rumored to be low on funds (which was educational to me, I didnt think it was possible) but bank runs operate on one thing: Fear.  And fear for people's money is far from being a main concern in this nation, unless of course you're invested in the stock market, which has been getting hammered.

Also, what no one else has mentioned, is the dollar is no longer on the gold standard. Our money is backed by the US Government now, not bars of gold. Theres a lot to explain, but the gold standard helped cause the Great Depression.

In short, I dont believe we'll go through another depression like The Great Depression.

---Also, as for a previous user, we can still trade on margins in the stock market, I have no idea what you're talking about. Also, this is the farthest thing from the cause of the crash of the stock market.  Trading on margins is yet another pricing mechanism for the market, and doesnt do much but help.

Answer 4

Yeah, I think it is VERY possible.  My husband and I took some money out of the bank. Enough to have 'under the mattress' to last us about 2 weeks and enough canned goods to last about a month.  Just in case.

Good Luck

Answer 5

Our economic system doesn't even resemble what existed in the 1920's. As bad as the so called "great depression" was, the financial markets were hit many times worse in 1987 and it is hard to find anyone that even knew it happened.

When you hear the Fed say we may default on interest payments, then it is time to buy gold and guns.

Answer 6

yeah if the federal reserve wants us too

Answer 7

The Great Depression was a result of (DEFLATION).... We do not have a deflation problem in this country except for Housing. So until the GDP of the US begins contracting by more than 10% per year, we are not going to relive 1933.

Answer 8

No,

The reason the Great Depression happened back the 20's was due to the stock market allowing people to buy the margin with out producing all of the funds for the stocks they were buying.  In today's market that can't really happen.  Remember the government doesn't directly control out economy, the people do.

Answer 9

Well, the last Depression was precipitated by governments DOING something about it -- e.g. advancing restrictive trade, raising taxes and reducing the money supply. One of the two candidates for President is on record supporting two of those elements, so I suppose it is a possibility.

Answer 10

i think so because prices are growing higher and higher and so people are unable to buy as much and they trade will slow and the government will loose money ergo- depression

Answer 11

.We should be able to avoid a major depression. There are many regulations in place, that were not active then. The $100,000 federal insurance per bank deposit is a good example.

The only banks that are threatened now are ones that made risky loans. Most banks are in good shape.

I think that fuel costs are a worse long-term problem -----That will continue to be a drag on the economy. Maybe the really good times are gone.