What a Depression Means

It is difficult to clearly discuss the 2008 Depression when 'depression' has an unclear definition. Building upon our earlier post about the 1929 Depression, today we will begin to look at some effects the 2008 Depression will have. We hope that this gives you, Reader, better insight into what is happening economically. This will serve as a foundation for later posts, when we will look at things you can do to thrive in this Depression.

First, we must make one thing very clear: there is nothing anyone can do to stop a depression. A depression is a natural action of any economy, and is a necessary thing from an economic standpoint. It will simply happen for any number of reasons, and when started must run its course, whatever that may be. Despite claims otherwise, no depression has ever been 'stopped' by any concerted effort, either by individuals or governments.

Simply put, a depression is an out-of-control freight train barreling down the mountain. The only thing you, Reader, can do is to try and get out of its way. There is no sure way to do this, though: the freight train may jump the tracks and plow right into you, even though you're running as fast as you can away from it. A depression, like the freight train, is unstoppable, destructive, and unpredictable.

With this analogy in mind, let's take a hard look at how it applies to the 2008 Depression. Nothing is safe, nothing is certain. You cannot assume that something will be unscathed by a depression: not your job; not your pension; not your investments; not your home's value; not even your money in the bank. Any number of these, or all of them, may fall prey to the 2008 Depression, and there is nothing that anyone can do to prevent it. If you have some privileged status, such as posessing a private fortune or being a highly paid professional, don't assume that this will protect you. Judging from history, the overall loss of income (wages, profits, etc. ) can be expected to be somewhere in the neighbourhood of 50%. Some will loose all their income, most will take substantial hits, although a fortunate few will even see an increase. However, things could be better, or worse, since a depression is unpredictable.

What you can do, however, is be alert and ready to make changes in your life at a moment's notice. Also, it is better to plan ahead than simply react after the event. What would you do if you lost your job, and couldn't replace it? What would you do if your pension went away? What would you do if your credit cards were all unusable? We realise these are all hard questions, Reader, but they must be asked. Although the answers will be painful, they are the most important pieces of information you can have in the 2008 Depression.