I can’t help but contemplate what the upcoming Greater Depression is going to look like. How the lifestyle of so many people will change, and in what ways. And I wonder how I personally may be affected by it all. Directly and/or indirectly.
Of course it is speculation — that we will enter a Greater Depression era. However it seems there’s no way to avoid it this time. The Covid sealed the deal. The can has been kicked down the road so many times, but this time the can isn’t going to move. It’ll be more than just a stubbed toe. It’ll break a leg.
So going under the assumption that our new lifestyle may enter tough times, what’s it going to look like out there? Have you thought about it?
A few thoughts:
30+ Million workers have recently lost their jobs. That is a mind blowing number. Some will get their jobs back when “government” allows them back to work (it remains to be seen how this will unfold). However I suspect many will not have a job to return to, because many small businesses will be bust. We’ll see…
These people are now collecting unemployment money from the government. How many will become a new permanent dependent (lower) class? Too many. At what cost to the already insane national debt?
Rich Get Richer While Middle Class Shifts To Lower Class
I read a Forbes report today revealing that the richest billionaires have increased their wealth by some 300+ Billion dollars during this Covid crisis. All while the middle class, and many small to medium size businesses are being smashed.
“From the start of March to now, the group of billionaires’ total wealth has increased by $308 billion. Billionaires boast a combined net worth of $3.229 trillion and their collective wealth skyrocketed up 1,130% between 1990 and 2020.”
An Over Extended Middle Class
There will be some blame on the middle class itself too. How many have over extended their finances? I suspect the majority have. People have been “livin’ large” for decades. How can that be? Well, it’s one word, “loan”. Loans (plural).
The middle class has been programmed to think in terms of monthly loans. They’re always in debt. Forever. But they might feel “rich” because their ride is a sweet 2020 SUV (or whatever). All while living in the “big house” – the one that they can barely afford the mortgage – but their friends are sure envious…
They can get away with all that so long as they’re steadily employed and are willing to live a life of fake wealth (they actually don’t own anything). But what happens when 30+ million of them lose their job? And then they need to pay those monthly loans, mortgages, rent…
Defaults and Bankruptcy
How many financial institutions are, or will be in trouble as we sink deeper into this new reality? How many people and businesses will file for bankruptcy when there’s nothing left to do?
The entire financial system is based on debt. Increasing debt. But when loans contract due to this new reality, well, so will the bottom line of these banks. There’s a ripple effect.
The country is essentially bankrupt. As government throws more and more billions and trillions at this problem, the value of its currency diminishes further. Which will make it all that much more difficult for the middle and lower classes to afford what they need.
WANTS Will Change to NEEDS
It will not take long at all for a very big attitude adjustment when finances are low to a sufficient extent.
Hard decisions and tough choices will be commonplace. Do I skip the car payment so I can make my rent or mortgage? Do I skip the rent this month so I can buy food? Things like that. Suddenly you will be able to get by with an older used car than a brand new one. Especially after the bank repos your new SUV.
Frugality will become necessary. There will be lots more of it. Fewer purchases in general. This will contribute to the already shrinking economy.
Downsizing. Personal downsizing and businesses downsizing while adjusting to a new normal.
When the new reality sets in, people will get angrier. Why? Because it will not be like it was before. For one thing, people don’t like change, or being forced to adapt. It’s happened already… lock-downs – stay at home – closures – massive job loss.
Humans aren’t designed to be cooped up. Locked down. It’s “gotta give”. Or it”s “gonna blow”.
As the depression era unfolds, people are not going to be happy about it. Those living in closest proximity to one another (city regions) will be especially stressed (because people aren’t wired to live this way). Nearly the same in modern suburbia with houses stacked up one after the other.
Really… So what’s it going to look like out there?
That’s going to depend on where you live. Because the lifestyles tend to be quite different in different places.
Unless some miracle happens very soon, I believe we’re headed towards some semblance of a Greater Depression. It will be different from the last one.
Most everyone lives a “modern” lifestyle now. One which relies upon many other complex and far-reaching systems in order to survive. Whereas back during the Great Depression, systems were fewer and largely local (or regional).
Shortages due to broken supply chains will result in a increasing necessity for “local”. Somehow. And in some ways yet to be seen. But there will be a movement towards local / regional rather than blindly relying upon larger complex (even global) systems.
Life in general will be much more difficult. Especially since most live in population dense regions where there are little or no local or regional systems to provide essential necessities (such as food) – or enough of it. Some may try to move away from it. Maybe rural real estate will become more valuable. Who knows…
What else could happen?
- increase in crime, especially city regions
- more poverty, probably lots more
- shortages of many things
- fewer food choices
- increasing animosity towards “the rich”
- a larger government dependent class
- potential shift to the left, or further
- trouble for businesses based on yesterdays lifestyle
- more barter
- civil unrest
What remains a big unknown is the Covid-19 virus, and how it unfolds into the future. This will affect our outcome. Additionally, it’s not only the virus itself, but to a greater extent it is the public’s perception of this virus. And subsequently their willingness to submit to measures put upon them and their lives. Time will tell. But by then, it may be too late.
What do you think the Greater Depression will look like?
I don’t think it’s going to look like the article’s featured image above of a farmer couple during the last Great Depression – at least for most people…
[ Read: Grandma Was A Prepper ]