Feb 20 2009
Finally, Our Generation’s First Depression
The Once and Future Farmer living at Today, urged me to grab some definitions to help clarify my Recession? Depression? topic. Although I had resisted the urge to do that at the time, relying instead upon the individual experience of an Old Man Who Mentors Me, I decided our Farmer Friend is right. A definition, even if there are many of them to honor, would be useful.
Just because it is the Source of All Great Knowlegde (Right sometimes, and wrong other times) I turned to Wikopedia, the brain candy encyclopedia for the masses, for a basic definition. Turns out, we have all the symptoms of our generation’s first true blue depression! We have “abnormal increases in unemployment,” and a restriction of credit,” plus “shrinking of output and investment.” Add to the mix “numerous bankruptcies,” “reduced trade and commerce,” and a deflation and , yes indeed, we have a Depression. No doubt it is not as bad as the times in which the Old Man lived, but it can be now labeled properly.
Well, phew, glad we finally got that over with. I don’t know about you, but I was getting pretty sick and tired of hearing the older generation say things like, “Man, you don’t know how bad it can get!” or “You don’t know what it isi like to lose everything,” or “You don’t know what it is like to go hungry!” As a child that grew up when real estate only went up in value, and stocks only went north, my good mentor is right: I’ve never lived bad times. Even the 1970’s were not like this.
Our good Farmer Friend recommended I head over to learn about the Baltic Dry Index. Three cheers for this obscure but excellent indicator, which seems to show that the general global economy is still moving, still growing, mostly because of China. This gives me heart, much like a person down with a bad flu has heard from everyone around them that the flu this year is bad, but it goes away in several days.
I’m no doubt a woman who has lived off of the fruits of our good nation and never had to pick up the tab. I would have appreciated going through a Depression when I was younger and not responsible for our childrens’ well being, but since one “can not choose the times in which they live” (according to Gandalf in Lord of the Rings), then we must rise to the occasion and do the best we can. Now our generation is living through the times that give us strength, the times that build our character, the times that make us appreciate saving money and going without meals so our kids can eat. Maybe we haven’t chosen this, but it is thrust upon us, and we must rise to our better nature and survive.
Someday I may have grandchildren who come to me for wisdom. Now I am living the acquisition of such wisdom. I need to practice my lines for them. Let’s see, “You don’t know how bad it can get.” “I remember when nobody wanted to buy a home for what the people had paid for it originally.” “I remember when the big banks went under and the government had to rescue them.”
In all seriousness, our generation will survive these bad times. We will retire. Our home values will go up again. We will live to tell of bad times to drive our children and grandchildren crazy with stories of which they can not relate. And when they suffer through this kind of cyclical downturn, they will have someone to whom they can turn, someone who will understand. And that will be our time to have the experience, to help them know that they can make it.
This is not a depression. It is a recession. The unemployment rate was higher from 1975-1986, going up to about 10%. The Depression of the 30’s had unemployment of 25%. Don’t believe all the rhetoric that comes from the Messiah’s mouth.
I actually agree with you that it is a recession. Don’t miss the glib tone of the article. However, if you notice that the definition given by Wikopedia fits a good deal of what is going on. Interestingly, those who lived through the Great Depression, and I’ve talked to a few of them, seem to feel we are heading into one. I do not.
Is there a Messiah someplace that I’ve missed?
I loved that way you wrote your article! You made me chuckle in the beginning. I think you are right, in time things will turn back around and everything will be fine. What a good story we can tell our future generation though!
Not to be a downer, but look carefully at the YoY info for the BDY. I’m not seeing growth, myself, and certainly not commensurate with other growth indices…like, say, population LOL!
I think it’s kind of funny how people get freaked out over “the D word”. So, it’s a depression (okay, a BIG, GLOBAL depression). It will suck for a lot of people. But, these things come and go or there wouldn’t be enough information to formulate theories like the Elliot Wave. The go-go economy is gone-gone. *shrug* Time folks learned you can’t have your Earth and eat it too. And my Dad was still right; it all boils down to three hots and a cot, everything else is gravy.
http://ourright2selfreliance.today.com/2009/01/01/three-hots-and-a-cot/
I am so enjoying your blog!
I absolutely think that our planet is so overpopulated that it is to the point where our fishing may damage the seas to the point where they may not come recover. As a former Alaska resident, I am overwhelmed by the number of people here in the Lower 48 that think there is no global wamring. I send them to AK.
I thank you for the comments above, and if you’d like to send me the links for the insight you would like to share. That would be awesome.
Thanks for stopping by.
I’m sorry if my typo caused any confusion; it should have been BDI instead of BDY. And the Year on Year info can be had here:
http://www.wikinvest.com/stock/Baltic_Dry_Index_-_BDI_(BALDRY)/WikiChart
That is an absolutely fantastic link and I’ll feature it on this blog in the near future. I recommend this to al of our readers, and thank you so much for sharing.
It is certainly a telling drop on the last quarter, but I see it edging up just a bit, and that gives me hope. Thank you for giving us this great link to a very stable indicator.