The Greater Depression Watch Begins...

I suppose you could also call it, The Great Depression II - Electric Boogaloo, but I'm not sure many people are going to find this a laughing matter in a short period of time.

I'm a student of history and the two constants in history that I can be certain of are that human beings are incredibly short sighted when they don't factor history into their equations and that human beings are certain that it will never happen to them. We all fall into the category of human beings, so don't take this too hard. Its a certain myopia endemic to our race.

So part of me is laughing to watch as Wall Street continues to crumble. I guess I'm in that place beyond fear and beyond anger where acceptance begins to nibble around and all you can do is watch, wait and laugh - laugh at the absurdity of it all. We humans have been convinced since time began that we could find a way to be safe and happy by trading little slips of paper or coins or giant tiki's covered in gold. And we're constantly surprised to learn that the Lord giveth and the Lord taketh away.

But what makes me laugh the most about this entire crisis is that while New York's financial center is burning, there are plenty of volunteers to play the fiddle. You see Goldman Sachs actually recorded a profit two days ago. But yesterday, their stock dropped 40% mostly as a result of profiteers short selling the stock (its a selling strategy that allows investors to make money when a company's value begins to fall - but it can also have the effect of driving a stock price down as short sellers reap profits). This may sound like an isolated instance, but the same exact thing brought the Bank of Scotland (the oldest bank in Scotland) to bankruptcy in just two days. And the same thing is bring the largest Chinese bank, and three of the largest Japanese banks down as well. If things continue on this path, by the beginning of next week, we should all be well on our way down the greasy slope to world wide depression.

You see what many people fail to understand and fail to remember is that world wide recessions and depressions are never about a sudden lack of money. Money remains the same. They are always about panics and crises of confidence. People invest money when they think they have it to invest because they're not worried about feeding their family. Our entire modern economy is based on investment. So, if people suddenly stop investing because they're suddenly convinced that they need to hold on to their money, the entire system dries up and whammo! We have a financial crisis.

"BUT WAIT!" you say. "We built all sorts of protections into our monetary system to prevent this from ever happening again! There's no way it can happen!" Might I remind you doubters of a certain ship that COULD NEVER SINK! What hubris we've endured! What collective foolishness!

But just to reiterate, I'm rather enjoying all this. You see, the way I figure it is that I don't have anything already. I don't own a house (can't afford one) and my job isn't so great that losing it would be a huge loss. I've lived without health care before and I've learned to survive on very little food in the past. So, I think I'll survive. And all the companies that I owe money to will go bankrupt long before I ever pay them back. So I'm actually doing okay in a worst case scenario. And as for the country and the people most affected by this - well, they've been living in a fantasy world that said that something like this would never happen again. I'm kind of enjoying the fact that they're about to get a large dose of reality. I ought to be panicking, but I'm not. Wall Street is... and that's the problem.