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"Stock prices have reached what looks like a permanently high plateau."
- Irving Fisher, PhD Economics, 17 October, 1929

"Home sales are coming down from the mountain peak, but they will level out at a high plateau - a plateau that is higher than previous peaks in the housing cycle."
- David Lereah, Chief Economist, National Association of Realtors, late 2005

By now, I suspect most out there have joined me in thinking of the current economic situation as the Great Depression of our times. Although the root causes were superficially different, the overall societal impact will probably be close to the same. I truly hope that those reading this have a roof over their heads this winter. It will be a hard one.

Because our patterns of society and even economic structure have changed, there will also be differences in how the economic fallout is felt. I can't say for better or for worse, because so many of these will be deeply individual and you will know better than I how they are likely to impact on your life. What follows is a mixture of how we got here and how things have changed since 1929. There is no advice here, only a skipping stone overview. After all, look where all the other advice has gotten us!

By now we all know the real estate speculation which started this particular crash when the rug was pulled out from underneath it. When I first heard that negative interest mortgages were being offered, I knew that what has now come to pass was only a matter of time.

But the truth is, this thing was waiting to happen. During the Great Depression, what triggered it was a combination of stock market speculation (and a corresponding loss of trust in the banks) and raised protectionist tariffs: but again, triggered only. Whether or not you happen to follow any of the schools of economic thought that suggest that economic cycles great and small are as inexorable as the tides of the sea - and we are right on schedule for the next major Kondratieff wave trough - it does not take a degree in economic theory to see that any economic structure based entirely on its own continuing expansion would have to reach a very sudden limit, followed by an equally sudden deflation.

The first wave

The first wave, and catalyst, was the sudden faltering of real estate sales as prices outstripped demand. Speculator mortgages which absolutely demanded a quick resale teetered on the brink of default, and then they tipped over.

The second wave

Banks which really should have known better had over-extended,

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