A Simultaneous Worldwide Depression,
and a Worldwide Famine,
and World War III
http://www.grandpappy.info/hdepress.htm
Following is a very brief summary of a few of the major events of the Great Depression of the 1930's and World War II:
On "Black Tuesday" October 29, 1929 the stock market crashed for two fundamental reasons. First, stock prices were artificially inflated. Stock prices were not directly related to the true value of the stock, such as the stock's dividend yield or the stock's price-earnings ratio. Instead stock prices were based on "faith" that the stock could be sold at an even higher price to someone else in the very near future. Second, most stocks were bought on margin, which meant that the investor only owned a very small piece of the stock because borrowed money had paid for the bulk of the purchase price. As long as stock prices remained stable or increased, then the investor was okay. However, when stock prices began to adjust downwards towards their true market value, the investors could not meet their margin calls and their loans were automatically closed out and their stocks sold. This snowballed into an avalanche of selling as stock prices continued to crash and "paper fortunes" were lost. (Note: Today's real estate price bubble of the year 2008 can be directly compared to the stock market price bubble of 1929.)
Beginning in late 1929 a variety of different businesses began to fail and unemployment began to skyrocket.
Between 1930 and 1931 approximately 2,300 United States Banks went bankrupt and their investors and depositors lost all the money they had entrusted to those banks.
On April 5, 1933, under Presidential Executive Order 6102, the United States Government seized all the gold owned by its citizens. The government also seized everyone's bank safe deposit box and then declared that those boxes could not be opened except in the presence of a representative of the United States Government. Although this action made the government, its officials, and the surviving bankers richer it did nothing to help relieve the suffering of ordinary people. The Depression continued to get worse for approximately 12 more years.
People were gradually and systematically evicted from their homes and their farms. This action helped to enrich the bank owners but it made the Depression worse because the experienced food growers were evicted from their farms. Therefore food production declined and the famine became worse worldwide.
Food became a very precious commodity. Government officials and bankers could still afford to buy food but ordinary people could not. Fortunately in many small communities and in most large cities there were charitable soup kitchens that provided multitudes of people with one small free meal per day. That meal usually consisted of a bowl of soup and a piece of bread. These soup kitchens were supported by the compassion and generosity of the people in each local community who still had some type of regular income.
On September 1, 1939 World War II began in Europe. The United States was drawn into the War with the bombing of Pearl Harbor on December 7, 1941. During the War many items disappeared from the stores and there was strict rationing of most of the remaining products. During World War II there was a massive loss of life and property.
On September 2, 1945 World War II ended. The people who survived the War were able to find work rebuilding the farms, homes, cities, and infrastructures that were destroyed during the War. The United States did not suffer the property damage inflicted on other nations so they were in a much better position to "recover" from the War. The Great Depression of the 1930's was at an end and the "Baby Boom" generation was just beginning.
Following is a brief summary on the "legal impact" of the Great Depression of the 1930's on ordinary people, just like you and me:
The life savings of millions of individuals systematically disappeared as approximately 2,300 banks permanently closed their doors. These banks were declared legally insolvent and they were therefore legally exempt from paying their debts to their depositors. In many cases the depositors received nothing or they received a few pennies for each dollar they had originally entrusted to those banks. (Personal Note: My great-grandparents lost their life savings when their local bank went bankrupt. My great-grandparents were just ordinary people: a Baptist Preacher and his wife.)
The farm mortgages and home mortgages held by those "insolvent" banks survived because they were legally transferred to a few "solvent" banks. The government declared that those mortgages were still legally binding debts and that the solvent banks had a right to collect on them. In addition, the solvent banks could keep the proceeds from those mortgages and they did not have to reimburse the depositors of the original "insolvent" banks whose money had originally been used to finance those mortgages.
Many families lost their homes and their farms when the "solvent" banks foreclosed on them and kicked them out into the streets.
The end result was that most individuals not only lost their life savings but they also lost their homes and their family farms. And a few "solvent" banks grew very rich and powerful during this process because it was all done legally and with the blessing and support of the government.
Occasionally people want to compare the Next Great Depression to the Great Depression of the 1930's (as briefly described above). Although this is an interesting intellectual exercise, it is a waste of time in my opinion because the Next Great Depression will be significantly different from the Great Depression of the 1930's for the reasons that are summarized below.
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Some Observations About
Moral Values, the Next Worldwide Depression,
the Next Worldwide Famine, and World War III
Moral Values:
During the past 40 years there has been a gradual and steady decline in moral values at all levels in society (individuals, business leaders, and government officials). There is no universal concept of basic right and wrong in the minds of many people around the world. Right and wrong is now loosely defined based on the current situation.
The entertainment industry has made "heroes" out of "normal individuals" when they behaved in a selfish manner during a life threatening situation. These movie heroes sometimes drive cars at high speeds through traffic (or onto the sidewalk) and they frequently cause accidents to other drivers who are simply on the same highway as the "hero." However, the audience doesn't know the names of those victims (or how many children are in the car that flips over or crashes into a wall) and our attention is only focused on the efforts of the hero to survive regardless of how much damage the hero does to everyone else on the highway (or on the sidewalk). The movie's message is a simple one: "Only your life is important and everyone else is expendable if it means your escape and survival." In the 1930's this type of movie would have been shocking and morally repulsive. People today, however, casually watch these movies without uttering one word of moral disapproval.
After several decades of this type of intellectual brainwashing, how do you think "normal people" are going to react if they discover they are in a life threatening situation? Will they consider your life and the lives of your children to be of any value? Movies originally made in the United States have been viewed in almost every part of the world for many years so no nation is exempt from this type of subtle but voluntary mind conditioning.
Although there are still a large number of very ethical people in every nation around the world, their numbers are at least equally matched by individuals who have no ethical values and who will do anything and everything they believe they can get away with, including theft, murder, rape, and the destruction of property. During a disaster event these unethical individuals blend in with everyone else until they see a situation where they can do as they wish without any fear of being caught or punished.
The Next Worldwide Depression:
Let's use a hypothetical Used Car Lot to illustrate the economic forces that bring on a Depression. In our example let's assume that the Used Car Lot owner has 50 used cars on his lot which he bought with a 10% down payment and 90% financing. He then sells each used car for approximately 20% more than his total investment in the car. Each month he replaces any used cars he sells, and he pays his monthly finance fees, and the rent and utilities on his car lot. Any money left over each month is his profit. However, if the economy does poorly and he only sells two used cars per month then his profit on those two sales will not be enough to pay his finance fees, rent, and utilities. He will have to borrow money to pay his other bills. But soon he will not be able to get a loan. The finance company will realize he has inadequate income. The finance company will foreclose on his loan and he will lose his meager source of income and his original 10% investment in the 50 used cars. The finance company will also lose because they will not be able to sell the 50 used cars for the amount of money they have invested in them. The reason is because during a Depression the price of all used cars will have fallen by at least 30%. In this type of situation everyone loses. The problem for the Used Car Lot owner was not his stable Balance Sheet which always showed 50 used cars. Instead his real problem was that his monthly income declined below the amount necessary to pay all his monthly bills.
The banking system of the entire world is currently not receiving enough monthly income to pay their monthly bills. And their Balance Sheet assets are at least 40 percent over-valued because they are based on unsecured credit card debts and loans on real estate at artificially inflated prices.
When the banks are eventually forced to declare bankruptcy it may take months or years to resolve the mess. During this period of time people will not be able to access their money in those banks and therefore they will not be able to pay their bills. However they will still be required to pay those bills or suffer the legal consequences. Do you think most people today will accept this situation in the same way that people did during the Great Depression of the 1930's?
One quick solution to this problem would be for the government to simply print more money and then give each depositor the full value of their insured deposits in cash. The government could once again print larger denomination bills, such as a $500 and a $1,000 bill. This would result in a tremendous increase in cash in circulation but there would be no corresponding increase in the amount of basic necessities, such as gasoline, food, and clothing. Prices would therefore rapidly increase and hyperinflation would result. Although people could no longer complain about the loss of their money within the banking system, they would now be complaining that prices were 5 or 10 or 100 times higher than before.
Another less obvious solution would be to create a "new" special electronic bank and completely eliminate all cash and all checks. The recent Zimbabwe experience could be used to justify the elimination of cash. With widespread media support many people might actually believe the government's claim that this new "cash elimination" policy would prevent future inflation. The individual deposit accounts and savings accounts from the old "insolvent" banks, up to $100,000 each, could then be immediately transferred into this new bank. And all the mortgages from the failed banks could also be immediately transferred to this new electronic bank. Then the new bank could mail each of its new depositors an ATM debit card so they could continue to pay their bills. All transactions would therefore clear through this "new" electronic bank. This would allow the government to easily monitor the selling price of all goods and services and thereby theoretically "control" prices. And then business could resume as usual except no one could buy or sell unless he or she had one of these new ATM debit cards and either an individual or a business account with the "new" electronic bank. The new ATM debit cards for individuals would have monthly spending limits. The government could claim that this "temporary spending limit" was necessary to control inflation. However its real objective would be to force people to remain forever dependent on the government and its "new" bank for their continued long-term survival. This solution would effectively "freeze/steal" everyone's money because each person would only be permitted to spend just enough of his or her money each month to buy "necessities as defined by the government" and pay the minimum payment on their current mortgages and other legal debts. This would create the "illusion" of wealth because each person could see the "balance of money" in his or her "new electronic bank" account. However, for one official reason or another, nobody would ever be allowed to spend that money. Each person's monthly spending allowance would be directly related to that person's monthly income. If a person did not work, then their monthly spending allowance would be drastically reduced, and they would be in danger of losing their home or apartment. The government could claim this was necessary to end the depression and force people to find some type of job. Therefore each person would have a very strong incentive to support this solution or suffer the following two consequences: (1) they would starve to death, and (2) they would lose their home and their life savings (which they have already lost but this solution would allow them to continue in a state of intellectual denial). This solution would save the government and the "real" bankers because they need peasants in order to exist. If all the peasants disappear then there is no need for a government or a bank. The quality of life can only be defined in relation to what other people have, or don't have, at any time in history.
The Next Worldwide Famine:
None of the governments of the world have enough food stockpiled to survive one more poor harvest year. Unless there is a reasonable worldwide food harvest during 2008 then a worldwide famine is inevitable.
Governments cannot hide the existence of a worldwide famine. Government propaganda will not be effective. People know when they are starving to death and the media will not be able to divert their attention to any other issue or topic. People quickly become painfully aware of their hunger, their weight loss, and their crying children. People will no longer be concerned about the private lives of famous celebrities. Their only concern will be about food prices and food availability. Everything else will become irrelevant by comparison.
During the next worldwide famine there will not be enough food for everyone. Therefore there will be no free food for anyone. Unlike the Great Depression of the 1930's, there will be no free soup kitchens, and no food pantries or churches distributing free food to needy families. Regardless of how pure your motives and intentions may be, it will be impossible to be charitable if you have nothing to give except sympathy.
The lack of food will result in a dramatic increase in food prices worldwide. Food is not an optional or discretionary expense. Everyone has to eat and food prices will rise because of the diminishing supply of food while the demand for food remains constant. There will not be enough food for everyone and therefore the poorer people of the world will have to do without because they will not be able to afford to pay $50 for one loaf of bread. The resulting worldwide famine will force the starving people within each nation to take some type of action in order to stay alive. If they do nothing then they will slowly and painfully starve to death. However, if they do something, even if it dangerous and morally wrong, then there will be at least some small chance that they might survive.
World War III:
As I mentioned in another article, there is only one long-term solution to a worldwide famine. One way or another the world population must be brought into equilibrium with the available world food supply.
When the "Great Depression" began in 1930 the world was still recovering from World War I and it was not yet ready for another global war. Today, however, there are a multitude of significant trouble spots all over the world. For example, China and Taiwan, India and Pakistan, United States and Iraq, United States and Afghanistan, Iran and Israel, Syria and Israel, Russia and its former satellites, Europe and its Muslin population. Almost any event anywhere could easily be used as an excuse to start World War III. During a World War food production always suffers significantly. Therefore, World War III would seriously disrupt the production and distribution of food. The combination of World War III and a worldwide famine would result in an astronomically high death toll. Unfortunately, this may work to the advantage of every government in the world. Each government would have fewer people to manage and fewer mouths to feed.
Any nation that refused to participate in the war and which preferred to devote their attention to food production would not survive for very long. They would become an immediate target for any nation with sufficient military might and few food resources. Therefore a peaceful nation would be forced into becoming an unwilling participant in World War III in order to protect its food supplies.
The chance of the United States surviving World War III without any damage to its cities or infrastructure is approximately zero. For example, one terrorist could start several large fires inside a big city on a windy day and the city would burn to the ground. A city's fire fighting system cannot handle several major fires in several different locations simultaneously.
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Summary
Since morals and ethics have seriously declined during the past 40 years, the upcoming "hard times" will not unfold in the same orderly and peaceful manner as the Great Depression of the 1930's. The crime rate in every nation will increase in direct proportion to the lack of jobs and the lack of food in that nation.
Most people depend on the "system" for survival (electricity, computers, cheap transportation, and just-in-time food deliveries). They do not know how to survive without these "basic necessities of life." If these "necessities" become undependable or unavailable, many people will honestly believe they have been betrayed by their leaders and that they deserve whatever they can steal from anyone and from anywhere. The "law of the jungle" and "survival of the fittest" will become the battle cry of these individuals. Therefore, ordinary honest people will be in mortal danger from the less ethical members of their own communities.
During periods of famine, high unemployment, and high crime rates, many young men and women voluntarily join their nation's military because the military advertises that they will feed them, house them, give them a little spending money, and provide them with a firearm and the training to use that weapon. From a young person's point of view this increases their chance of survival during the hard times. However, in exchange these young people give up their right to make their own decisions and they must do whatever they are told to do or face a military firing squad. These young people are almost immediately transferred to a "hot" conflict area, or onto a front battle line, where most of them eventually die. As their life force gradually fades and flickers, these young people become painfully aware that their decision to join the miliary did not result in their survival during the hard times. Instead their lives, and the lives of the enemy soldiers they have killed, are being sacrificed to reduce future birth rates and to reduce the current demand on limited food resources.
Except in the United States, the citizens of most other nations have been stripped of their ability to protect themselves from anyone, including armed criminals and invading enemy soldiers. Therefore, in most nations the first people to die will be the moral, ethical, law abiding residents of the nation. Once most of the peasants are dead, there will only be government officials, its military, and the criminal element of society. None of these groups actually produces anything. It was the peasants who did all the real work and when they are gone that society will be doomed. Each nation will start attacking its neighbors in a fight over the few remaining resources.
Therefore the upcoming "hard times" will be an extremely dangerous period and, when it is over, there is a chance that only a few honest, moral people will have survived. Hopefully you and your family will be among the survivors.
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Conclusion
In conclusion, a prudent individual will carefully consider:
The chance of one of these events occurring, and
The impact that event could have on his or her life.
If an event has a high chance of occurrence but its impact would be minor then it does not require a contingency plan.
If an event has a low chance of occurrence but it could have a drastic impact on your life, then a contingency plan would be appropriate.
Even though the media and most world government "official statistics" say otherwise, our world is quickly sliding from the recession phase into the depression phase. And although there is still some food available in some countries, there are already severe food shortages and food riots in many nations around the globe. And with the tremendous amount of social unrest in so many different trouble spots all over the earth, the chance of World War III being delayed much longer is very slim.
In the 1930's the above events gradually unfolded over a period of about ten years. However there is a very good chance that all three of these events will occur simultaneously in the very near future.
Therefore, my recommendation is that you make the appropriate contingency plans for the continued survival of your family in the event of a simultaneous worldwide depression, and a worldwide famine, and World War III. You might want to consider one of the following strategies:
Become a part of a small farming community that still has a functioning local government and a basic infrastructure, such as a doctor, dentist, sheriff, general store, shoe maker, carpenter, plumber, seamstress, etc. The farming community should also be one where its citizens still have the right to legally own weapons and where they have the right to work together to defend themselves against attack from organized gangs of criminals and from enemy forces from foreign countries.
Disappear into the wilderness for a few years until World War III has run its course and honest people once again have a chance to live together in peace.
Perhaps the most logical choice would be to implement option one above and then wait and see how future events gradually unfold. If at some future date you become a target for elimination due to your ethnic heritage, or religious or political beliefs, then you could switch to option two above. Option two is a much more challenging option because it is a very difficult, lonely, and unpredictable way to live. However, in my opinion, option two would be better than facing a firing squad, or the gas chamber, or the guillotine. If you wish to know more about option two above, then please click on http://www.grandpappy.info/indexwil.htm for some detailed information about wilderness survival.
Awesome reading Army Girl,thanks a million.The article make so much sense in so many ways.
