Experts and analysts are anticipating an economic depression once again in Europe. In past, it was 1930, when Europe underwent a deep concerning and historic economic depression. It was a saga of struggle for many people and their families. Now in the 21st century, economic depression is here again, and in order to survive from this one, a lot of discussions are going on all over. In the year of 1930, situations were tough, but as a standard of life at that time was different from today, and requirements for life weren’t that high, the depression was bearable. In the present era, things have changed drastically. This is the era of technology and electronic gears. Thus, the standard of life of the people is now quite high. Naturally, getting out of the economic depression seems quite impossible in these days.
From the times of Great depression to current scenario, there have been numerous effects of economic depressions, no matter what their magnitude have been. Interestingly, while some effects have been bad, some have been good too. You might wonder how it is possible. Then the following information would really be worth grasping.
While any depression in US economy brings a bad news around the globe, still it allows us to learn. On one side, so many businesses try their best to come out of the depression and try making some gains by cutting down on the number of employees and their wages, the brighter side to this includes new ways to tackle such problems. Of course, the pace is much slower, but economies, when jolted, try their best to stand again and work harder to gain what they have already lost.
Let us say that economic depression may strike you, if not hard, may be in softer tones. In such a case, the first of the things you would think about would be shelter, food and of course, money. Undoubtedly, these are essentials, but are these the “only” things you need to worry about? Hold on to that thought here.
Think about clothes to begin with. In case you are living in cold climate, you need to put some thoughts of yours in the importance of warm clothes. So, do not forget about jackets, blankets, and such important accessories to tackle the cold weather. If you happen to face a lot of rain, then brace yourself and store up some substantial rain attire.
When we talk about economic depression, we can never leave out The Great Depression that surfaced in 1929 and its effect could be felt for no less than 10 years. After that period, quite many depressions were faced but nothing ever matched the 1929 Wall Street crash. It was one time when US GDP went really low and unemployment percentage went very high.
So, exactly what results in an economic depression? If we take the example of the Great Depression, we will find that the culprit behind it was monetary policies that were contradicting. While Federal Reserve wished to pull stock market to a little low, it ended up with a crash and as it so happened, interest rates kept going up only to maintain gold standards. No one seemed eager to put fuel into the economy by supplying money and as a result, the fall was 30 percent.
As recession enveloped many economies in past few years, one thing is certain that economists do not really believe it as anything leading us to an economic depression. They, however, call recession as a part of the business cycle of modern days. For a layman, let us simplify it as this; when in business, we do make profits but cannot really avoid losses and yet, losses never determine that your business is going to shut off in near future. In order to make your business run smoothly again, you make strategies, add and remove various components that you find fit to be altered and hence, you proceed towards making profits again. If the new strategies do not work for you, you again come up with new plans until things start working efficiently again.
Recession can be classified as a synonym to the situation above. The Economic crisis will mean that your business is so bad that no matter what you do, it is causing you huge losses and that too for a certain period of time and during that time period, things have gone way out of control and you ‘may’ have to start everything from as low as scratch.