British Economy Is WORSE than During the Great Depression

Royal Bank of Scotland Says Worst Economy Since Before Queen Victoria Was Crowned

Leading British newspaper the Telegraph reports today:

Ministers today admitted Britain is facing “very, very grave difficulties” after figures showed the economy did not grow at all in 2012.


Economists from the Royal Bank of Scotland said the last four years have produced the worst economic performance in a non post-war period since records started being collected in the 1830s.


It’s the worst economic performance since at least 1830, outside of post-war demobilisations,” he told The Daily Telegraph. “It’s worse than the 1920s, it’s worse than the Great Depression.”

He said the economy has been “heading this way for a long time” because of the scale of the problems that came to a head in the 2008 financial crash.


The top economist at RBS, which is mostly owned by the Government, said it is difficult to recover when much of the world is facing similar problems.

“It’s the scale of what happened in 2008 but also the build-up to that,” he said. “Compared with other recessions [like in the 1980s and 1990s], this is happening all over the world. There’s not a quick and easy way to export your way out of this.”

(In a separate article, the Telegraph notes that the UK is heading for an unprecedented triple dip, as its economy shrunk .3 percent in the fourth quarter of 2012).

We’ve repeatedly warned that this is worse than the Great Depression …

What Do Economic Indicators Say?

We’ve repeatedly pointed out that there are many indicators which show that the last 5 years have been worse than the Great Depression of the 1930s, including:

Mark McHugh reports:

Velocity of money is the frequency with which a unit of money is spent on new goods and services. It is a far better indicator of economic activity than GDP, consumer prices, the stock market, or sales of men’s underwear (which Greenspan was fond of ogling). In a healthy economy, the same dollar is collected as payment and subsequently spent many times over. In a depression, the velocity of money goes catatonic. Velocity of money is calculated by simply dividing GDP by a given money supply. This VoM chart using monetary base should end any discussion of what ”this” is and whether or not anybody should be using the word “recovery” with a straight face:

In just four short years, our “enlightened” policy-makers have slowed money velocity to depths never seen in the Great Depression.

(As we’ve previously explained, the Fed has intentionally squashed money multipliers and money velocity as a way to battle inflation. And see this)

Indeed, the number of Americans relying on government assistance to obtain basic food may be higher now that during the Great Depression. The only reason we don’t see “soup lines” like we did in the 30s is because of the massive food stamp program.

And while apologists for government and bank policy point to unemployment as being better than during the 1930s, even that claim is debatable.

What Do Economists Say?

Indeed, many economists agree that this could be worse than the Great Depression, including:

Bad Policy Has Us Stuck

We are stuck in a depression because the government has done all of the wrong things, and has failed to address the core problems.

Instead of bringing in new legs, we keep on recycling the same old re-treads who caused the problem in the first place.

For example:

  • The government is doing everything else wrong, as well. See this and this

This isn’t an issue of left versus right … it’s corruption and bad policies which help the super-elite but are causing a depression for the vast majority of the people.

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  • Daisee

    Wow, thanks for those links.

  • goingnowherefast

    The banksters backed up by their high tech armies have world leaders by the throat. No one dares to challenge their stranglehold on our economies. The human race has never faced a more dire threat. We are all staring the grim reaper in the face. What to do?

    • Help destroy, unwarranted by facts, partisan certainties by pointing to centrist collusion as finding no partisan identity or support on discreet issues affecting the slide into austerity and debt-peonage.

      If the public does not wake up to the policies of an unelected party of centrist royalists and their globalization and financialization of productive economies objectives, it will continue getting a balanced bitch slapping from the left and the right, and made to reflexively defend their “own” quisling representatives as they ride roughshod over their hopes and dreams – all in the name of centrist neoliberal comity.

      • Southernfink

        I cannot help but notice that the US needs to do away with it’s current model of government which is owned by the bankers.
        Why not replace the bailed out banks with government owned banks ,in turn that ought to save on interest payments.

      • Southernfink

        I cannot help but notice that the US needs to do away with it’s current model of government which is owned by the bankers.
        Why not replace the bailed out banks with government owned banks ,in turn that ought to save on interest payments.

  • HS

    We appear to be at the apex of a third bubble and they’ve exhausted their bag of tricks.

  • nveric

    “Velocity of money” a term I learned of in the 1970s, and haven’t heard of since.