Compare And Contrast To The Great Depression: In Three Parts

Tyler Durden's picture

Every year, at about this time (roughly just before the Fed launches on yet another monetary easing crusade) we get requests to decompose current events into their constituent pieces and present these in parallel with the period in time between 1929 and 1939 better known as the Great Depression. Obviously, doing so in its entirety would require at least a fat paperback, and considering that the average Zero Hedge reader has an attention span that is very stretched when presented with a lengthy bullet point, we fear such efforts may be lost on most. Furthermore, why reconstruct the wheel when it was precisely a year ago (and remember: 2011 is a carbon copy of 2010, so it is effectively yesterday) that Guggenheim's Scott Minerd did just that and in a far more politically and grammatically correct way than we ever could, not to mention with that many more pretty charts. So without further ado, here is Scott Minerd's compare and contrast of the Second Great Depression (the one we are now debating whether or not it has become a recession or not once again) to the original source.

Part 1: ‘Compared to the Incomparable’ (pdf)


Part 2: ‘The Fed, Now and Then’ (pdf)


Part 3: ‘Following the Mistakes of a Hero’ (pdf)


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sid farkas's picture

depression bitchez!

Ahmeexnal's picture

It will be worse this time.

Manthong's picture

"It will be worse this time."

Indeed.. the country is flat broke and in debt, the prospects for growth are bleak, the Constitutional foundation has collapsed, the cultural foundations have crumbled, the internal conflicts are much worse and the external threats are every bit as severe, if not worse.

Hard times ahead.

PaperBugsBurn's picture

What external threats??? Are you referring to the banksters who murdered 2 US presidents (that we know of)?? If not, you're brainwashed. The US has thousands of nukes; you don't even need an army.


man, ppl are dense

Bring the Gold's picture

JFK and Lincoln? Or were you talking about McKinley? I've even heard Zachary Taylor thrown out there as a possibility.

anonymous_user_000001's picture

Seems to be very pro-keynesian policies.  As a contrast, time to revisit this research piece from the Mackinac Center:


"Great Myths of the Great Depression"


rocker's picture

But, But, if the markets keep burning shorts and goes up, insn't that the economy?  Big Ben thinks.

Besides Ben needs to deflate the debt of the Banksters and the FED even more.  That's deflation, right?

Isn't this what Big Ben, Elliott Wave,(asshole) call deflation. When wages go down and your bills go up.  Eh.

Libertarians for Prosperity's picture



...and considering that the average Zero Hedge reader has an attention span that is very stretched when presented with a lengthy bullet point......

Did I read that correctly?  Is Tyler turning on his own audience?  Can't really blame him....

spiral_eyes's picture

By the way, as one guy writing a financial blog, I have determined that there is no fucking way tyler is one person. The amount of stuff he puts out..... you'd have to be some kind of super-human meth and ritalin freak to have enough stamina to do that. 

Unless MAYBE he is the editor, and he has 3 or 4 subordinates searching the blogosphere and news sphere for tidbits, feeding him info and preparing posts for him to finish, etc.

If I am wrong then big fucking kudos to you tyler. I don't know how you do it. 

thewhitelion's picture

I think was more a playful jab.  Sort of like when Bart Simpson makes fun of Fox.

spiral_eyes's picture

Seriously wtf is this shit?

It concludes bernanke got everything right? Um how about he and his predecessors not fuelling the speculative bubbles in the first place? If this is the liquidity trap Benny claims it is how about not paying interest on excess reserves that he just pumped into the system so banks have no choice but to start lending instead of hoarding? How about recognising the reality of biflation and demanding Obama take action to lessen the crushing food and fuel inflation instead of making bullshitty prosaic statements about how "gold is not money?"

Benny and friends learned a few lessons from the 30s and Milton Friedman, but what they didn't learn is that bailing everything out not only fuels a lot of moral hazard (the tumour at the heart of the system as my friend NNT puts it), but merely transfers the danger from the corporate and institutional level, where the fallout is relatively minor, to the governmental level where the damage will be ginormous. The weight of sovereign debt, and the extent of debasement gets greater and greater... Creditors do not like seeing their holdings debased, and because American creditors control America's oil inflows and manufactured goods inflows infuriating them destabilises the entire global system. 

THAT is the story that will be in the history books in 50 years. And you heard it here first on Zero Hedge.

Peace, brothers and sisters

Money 4 Nothing's picture

"Gold is money, Everything else is credit" -J.P. Morgan..

TruthInSunshine's picture
Dear Ben, Please Print Us More Money

by Wolf Richter

Dear Ben,

Please print us more money. We want you to prop up the stock market. Everybody knows it's a Ponzi scheme that will collapse without your support. You don't want us to end up like Bernie Madoff's clients. No, Ben, we love Ponzi schemes. We get in early and get out before they collapse. That's why we're rich. The bad thing is that they sometimes collapse before we can get out. But you already bailed us out twice in the last couple of years through printing trillions of dollars. Why not a third time?


That will also keep the bond-market bubble inflated. We have to admit that you've done an excellent job there, hands down. Negative real yields all the way up the yield curve! Awesome. Now if you could just print a few trillions and buy up the sovereigns from the PIIGS. Euro crisis over. End of story. And we'd get richer because we'd sell them to you at face value though we bought them at fifty cents on the dollar.


And why not forever? Just keep printing. Because as soon as you stop, stock markets will crash again, and credit markets will seize, and then we're back on this awful ride to hell.


Of course, it'll cause inflation, which is good. You yourself said that. You stated many times that you want inflation. In fact, you said that one of the goals of the Fed, after propping up the markets, is to create inflation. So stick to it, Ben. Don't slack off suddenly just because some cowboy threatened you.


Inflation, in conjunction with your near-zero yields, has all sorts of benefits. For example, it will eat up the Social Security trust fund, whose $2 trillion balance is invested in treasuries. Fixed-income investors, retirees, and everybody who has any savings will also be demolished. And homeowners. But don't worry. They won't figure it out. They don't get a statement every month that shows how much inflation cost them. It's a quiet way of stealing from them, and it'll impoverish them over time, but it'll make us, the recipients of the money you print, richer.

You see, Ben, we can charge higher prices for our goods and services. And even if we have to pay more for raw materials, we look good. Our inventories increase in value, and we can claim sales jumped 10% because we raised prices by 10%. Analysts dig that.


Recently, Ben, you've done a decent job on inflation. In July, we were running at an annual rate of 6%. Not bad. But you need to preempt any cooling off. So keep printing.


Now, we're not talking about wage inflation. Oh no. We have to keep wages down. We need cheap labor, or else we'd have to send these jobs to China—which we're doing anyway. And not just to assemble iPhones...

Read the rest:

Link: Dear Ben, Please Print Us More Money

Pay Day Today's picture

"THAT is the story that will be in the history books in 50 years. And you heard it here first on Zero Hedge."

If they are still writing and publishing new history textbooks in 50 years, maybe things aren't going to be that bad.



Help Is Not Coming's picture

"The fact that the Fed stands ready with another round of quantitative easing, and that interest rates are at historically low levels, leads me to believe the economy will avoid the perils of a “double-dip” recession in the near term."

Thinking like that calls into question the rest of his suppositions.

Manthong's picture

Thanks for the link.

"But unprecedented political bungling instead prolonged the misery for over 10 years'

We'll be lucky to come out of this next one with our skins much less survive 10 years of misery.


Manthong's picture

What external threats?

Aggressive Islamic fundamentalism and jihadi terrorism, espionage, criminal aliens, parasitic viruses, third world asymmetric conventional, unconventional and nuclear attack, hostile economic and monetary action, and hostile cyber action come to mind.

There is no direct military challenge to us from another nation, but the economic damage done to us through extrinsic activity and hostilities is considerable.  We do not live in a world where we can prosper in isolation.

We tend to get carried away, and we often screw up but either you get the bear or the bear gets you.

And it seems idiots on the other end of our foreign policy actions almost always end up better off than where they started.

I don’t know though, things are so FUBAR that I don’t think it that any action or inaction is going to matter much in the end.

That “long enough time line” seems to be looking pretty short.

And yeah, I would include the Rothschilds, and probably a good number of the Bilderbergs in the external category. Morgans, Rockeffellers et al qualify from the internal perspective.

blunderdog's picture

Aggressive Islamic fundamentalism and jihadi terrorism, espionage, criminal aliens, parasitic viruses, third world asymmetric conventional, unconventional and nuclear attack, hostile economic and monetary action, and hostile cyber action come to mind.

Almost none of those are appropriately called "external" threats.  I'd grant what you call "third world asymmetric attack," but even that won't be external in another few years, given what's happening to the standard of living in the USA.

I'd say the big threat won't be among the things you mention, but how we as a nation choose to respond to them.

ping's picture

I'm not aiming this at previous posters, but it's worth saying.

Most of the time, I live in Britain (Americans: also called England-cester, Queenshireville, or Fagland. We are next to France, which is why we drink. We are not German, which is why we drink cheap stuff.)

Them ayrab mooslemey terrists have killed a shedload less people over in Europe than American-funded terrorists ever have. The IRA here, Operation Gladio in Italy, Belgium's 'Cellules Communistes Combattantes' (about as communist as my butt, which is a noncommunist manly butt) - and on and on. US money, US explosives, US guns, US training. All thrown against Nato allies. Democracies. Or what passes for them.

Got no love for islam, but - whether or not you throw in to the mix that 9/11 and 7/7 were false flags - a moslem's a lot less likely to kill me than an American is, so long as I don't try to bomb the bejeezus out of their kids, which I hear makes them all 'blah blah allah yee yee yee' and unreasonably snippy. 

Incidentally, I've worked in the States a lot, traveling there for different European firms. Before 9/11, it was pretty much normal that I could walk into a bar in any city in the country and some pissed guy in a trucker's baseball cap would talk about how awesome the IRA was, and how a friend of his totally gave them money, he was such a cool dude. Now it only happens in every other bar. Americans have really come on a long way. 



AnAnonymous's picture

We are not German
English are german, this must be corrected.

ping's picture

Oh, it will be. They are drawing up plans. Neatly, and on time ;o)   

PS +1. I gave you a vote.


ping's picture

Although (sorry, sorry, tedious history graduate at work here, it doesn't wash out...) it turns out that the population of Britain is rather un-Germanic in its genetic markers. Much less than somewhere like Holland, Switzerland or Belgium. We share a lot of genes with the Irish, legacy Iberian populations, and the original hunter-gatherers who settled in the British Isles after the ice age. Basically, we're a mix of redhaired and swarthy types with bits and bobs of other people thrown in. Bit of Celt, bit of Roman, bit of Viking, bit of French, bit of Dane. The Queen's German, though, so you get double points for that.   

Bobbyrib's picture

I think you meant the Irish share genes with Brits.

AnAnonymous's picture

No. When Saxons invaded Britain, they imposed an apartheid on the local population, celtic people.

The consequence: english are german.

Whereever you go, it is always the same people who seems at the root of the issue.

And indeed, they are german elsewhere than in Britain and Germany.

The US population largest minority, if not majority, is german.

Bobbyrib's picture

The IRA still exists?

Help Is Not Coming's picture

Sure, if only because Congress hasn't confiscated them yet.

Bring the Gold's picture

A very dark part of the soul laughs at this because I, like many on here, have warned against all this for over a decade (I'm sure many on here for much longer).

Then I recognize that this mortal coil is also in peril and the laugh kind of turns into a coughing fit, which in turn changes into tears and the circle is completed with more laughter because really what else can you do?

We're so Effing doomed.

Bolweevil's picture

Cheer the fuck up and get your heads straight. Thar be dragons, yes. But starting this process from our comparatively comfy current spot with a 'woe is we' attitude is a plan to fail. You are sovereign. Go where your heart directs post haste. H O L D F A S T

oldman's picture

Yea Bolweevil!!!

You say that so well----this is a great time to find out what one's survival skills are and hone them up where they are lacking. Your comment touches the wonderful moment of 'is' that makes being human special. Bravo!!!

Thanks for the straight talk                 om


Cabreado's picture

This period of perceived relative calm is, I believe, scaring the bejeesus out of rational minds. 

Oh, and, the irrational ones, too.

forexskin's picture

this analysis is so f*****g mainstream i don't know where to begin to criticise it...

unemployment 9.9%? sh*t, UE stats in the '30's included those employed by the gov't..

and on, and on...

i guess if you want to keep you job at Guggenheim, you hafta temper the analysis so the boat rocking looks large from the inside, but not so much to anyone with a non-keynsian brain...

at least we can keep track of the proceedings in the echo chamber with sh*t like this...


GeorgeHayduke's picture

I'm not worried about the manufactured external threats. However, we have a whole different cultural attitude this time around and that's what concerns me. During the first depression it appears that most of the population of had this "we're all in this together" attitude. In today's world there's a much stronger "I've got mine screw you attitude" and I don't think that prevailing trend will be helpful.

In addition, we also have people tattooing themselves up in all kinds of menacingand intimidating ways and wearing their "Tap-Out" shirts and logos on their cars, and the whole "I'm a bad mother-fucker" undercurrent running underneath things might not work out so well this time. But that's just me and James Kunstler concerned about these things I guess.

Bananamerican's picture

no, i'm concerned about it too...In Studs Terkel's "Hard Times", GDI americans told Studs (what a BITCHEN name...) that they wondered how "modern" americans would fare in a GDII in the "mean" 1970's lol...

If this were happening in a 70's style america, the country might just go "back to the land MAN" (en masse) and raise wheat germ, "herb", tofu, sprouts...

 BUt now? In a "I'm not here to make friends...I'm here to WIN" amerika??I picture a "post Katrina" on steroids, a twist of tat festooned, transgressive "Batitude" with a Rodney King chaser, fuck yeah...

our countrymen have become particularly stupid and full of themselves...

"Decadent", in a word

Mauibrad's picture

Yep.  Big cities won't be a good place to be.

RSloane's picture

Big cities are already not a good place to be.

SMG's picture

You're right.   But let's rebuild better this time.  Let's never let an oligarchy enslave us and hold secrets again.   Let's make a truly better world this time. 

Bananamerican's picture


Long-John-Silver's picture

This one splits the country. Texas, Alaska, and Hawaii go totally independent. The 13 old Confederate States along with much of the mid-western States becomes a natural resource rich nation. The North East  little will retain the old United States of America name but it will be a copy of the failed European welfare state emulating Detroit. The West will be taken over by Mexican Drug gangs and will be called the Northern Mexico region.

Bolweevil's picture

They'll probably push far up the San Jaoquin valley, but will encounter major opposition at numerous choke points along the coast. I draw the line at Rincon. Carlos don't surf.

Shineola's picture

The west, not the west coast, is already firmly under the control of the citizenry.   We have our local and state governments, and our Sheriffs.  Nobody in the Heartland gives a rat's ass what the rest of the nation does.  The average Joe here can shoot a man in the head from a quarter mile.   Then, we have the good shooters.   We have the coal mines, ANFO,  food, oil and gas, regional refineries, millions of guns, and some badass national guard units. (Who happen to work for the Governors)   

Read Molon Labe and you might get the picture.   If somebody wants our land, all they have to do is........"Come and take it."

slewie the pi-rat's picture

read my lips:  my mother doesn't like people to talk about rats that way 

and, if you think the hallmark of citizenship is being able to shoot a man in the head @ 440 yrds, but are so insecure as to have nothing but the "we...we...we..." it is only b/c you are still a mama's boy and haven't yet learned to stand on your own two feet, think for yourself, and work toward a future where farmboys don't grow up hallucinating the murder of those who are not "from the Heartland"

i would hope you discover something of worth in yourself, at least above the level of becoming a "crack shot"

i also hope you have not become imprisoned by an eternal game of narrow-minded checkers down to the store w/ the sody pop, by people who never question their own point of view, and who have somehow trained you to do the same

good luck!  sure sounds like you are gonna need some!

Shineola's picture

Mr. Rat, I can assure you that I'm the most non-violent guy you could ever wish to meet.   Evidently, my culture is so different from yours that you see my ability to defend myself as "murder of those not from the heartland". Sir, I apologize for the misunderstanding.  It is nothing like that at all.  I never question another persons motives or point of view.  I deal only with actions or behaviors.

My post was in response to another post that postulated a possible violent take-over of our western states by foreign nationals.    I was simply pointing out the cultural facts that will prevent that from ever happening.  I will not surrender.  Yet, unless attacked, I am a threat to no one. 

Perhaps you live in a place where you hope the police will protect you?  I live in a place where the police know that I will help to protect them.

As Robert Heinlein observed, "An armed society is a polite society".

Since I don't wish to spoil your image of me, I'll admit that I'm barefoot, un-educated, and wearing bib-overalls. :) 

Kind Regards, -Shine

slewie the pi-rat's picture

how do you know your culture is so different from mine?  i read more heinlein than you've ever touched during one short year in the army, in vietNam, killer-boy peace lover

i meant what i siad about your conditioning;  if you think your 22:24 post was written by a person who understands the way of non-violence, you may be correct, it is not, theoretically impossible, from what i read.  but more likely just another shithead who insists on having it "both ways" no matter whaaaaat...

and don't be overly concerned abt your "image", here, at this point.  i still say, from what you have written, that w/out the collective "sheriff" and "national guard" and "crack shots everywhere", there would only be you, and a very controlling mother.  no other threats, nobody to protect mom from, either, except your own latent violence and incipient psychosis

and if someone postulates the second coming or invasion of the body snatchers, i hope you have enough collective violence in your "community" to respond to those fantasies "appropriately" too, killer-boy peace lover.  make yer mama p-r-o-u-d!!!!!

AnAnonymous's picture

As Robert Heinlein observed, "An armed society is a polite society".


Wrong observation then.

slewie the pi-rat's picture

is it just me or does it sound like them duke boys mighta sold out to boss hogg, here?

slewie the pi-rat's picture

it may be too complex for 4 people but them duke boys didn't usta work with the pigman and his law-boyz, but now, i guess mommy likes it better, that way...

Yankee.go.home's picture

Wow you squelched even your own conversation thread.