Are We Heading Towards A Great Depression?

US Sub-prime, Financial Meltdown, Global Financial Crisis, Recession, Retrenchment, Huge MNC Collapse, Bailouts, Trade Deficit, what not?

Those are familar words in the last few months, all thanks to inefficient governance of the US Giant. No point talking about blame, we all know it by now.

President Elect Obama's first challenge should have to do with an budget deficit of $1.2 trillion for fiscal year 2009, just as he steps into office. He have to thank the years of poor administration. How he can reduce the deficit and create job, create consumer confidence, etc, to recover the World's No 1 economy remains a challenge.
(source : http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B53217752%2D6CF9%2D4AEB%2D89D5%2D99EA412DA5FF%7D )

More and more large MNCs are coming out to admit the skeleton in the closet. I believe we have not seen all yet, suspecting there will be more decomposing corpse to be exposed in the coming few months.

Retrenchments have increased. London's Marks & Spenser, China's Lenovo, Japan's TDK, etc, have all announced retrenchment news. With more jobless, spending power will decline even further, thus resulting in more hits on retails, food & beverage industry, tourism, etc. This will result in even more joblessness in the coming months.

Even the porno industry is asking for US$5 billion bailout, claiming people are too depressed with the financial situation that they lost interest in sex. So what is the big deal and why does the government even want to rescue an industry where these people are paid to have wild sex? Afterall, when the economy is so uncertain for an uncertain extended period as well, who has the money to have childrens? This joke came as an awakening that some organisation are making use of the situation to rob the people.
(source : http://news.aol.com/political-machine/2009/01/07/porn-industry-to-request-bailout/ )

Stock market had taken a huge beating in the last half a year. Most indexes have plunge to all time low, crude oil were largely inflated and had plunged. Crude oil peaked at above $150 per barrel, while Gold peaked at above US$1,000 per ounce, before falling deeply. Oil and Gold price climbed recently due to the Israel's conflict with Hamas (Gaza) and new attack by Hezbollah militants (Lebanon) today.

With so much bad news, would it mean, we are heading towards the Great Depression, or is it going to be unavoidable? Too much coincidence. The last Great Depression was in 1929, and lasted for about 10 years.

During the Great Depression (btw, that Depression also originated from the United States), stock market crashed globally, joblessness was at all time high, etc. The last Depression reached its end when the World War II started in 1938.

With so much coincidence, we better be wary.