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[The Machine]

LOTS of people think the UK economy is doing terribly. They're right, of course. But Britain isn't doing anywhere near as terribly as it will likely do yet, writes Adrian Ash at BullionVault.

"This is a far longer period of depressed output than the Great Depression," reckons Jonathan Portes, director of UK think tank the National Institute of Economic & Social Research (NIESR) and previously chief economist under the former New Labour government at the Cabinet Office in Downing Street.

Portes knows an economic disaster when he sees one, in short. Albeit in the rear-view mirror. Now Portes' analysis is quoted by Brad DeLong at the University of California, Berkeley...only a week after Professor DeLong quoted the very same idea, that time from Menzie Chinn, professor of Public Affairs & Economics at the University of Wisconsin.

"The UK is in the first double dip recession since 1975," says Chinn. "This recovery is in fact worse than that of the Great Depression," he adds, citing Reuters – who were in fact channeling the UK's state-paid beancounters, the Office for National Statistics no less, who were actually channeling Paul Krugman who was – Christ no! – in fact repeating Jonathan Portes of the NIESR, who first made the Great Depression comparison back in January!

Confused? No matter. Because circular as the meme's route might be from one would-be legislator to another, it's starting to stick. The data prove it after all. If you chart UK economic output from 2008...and compare its real path with that starting in 1930...you find that this recession is now longer-lived that the Great Depression. Meaning 1929 to 1934, of course. But only in the United States.


Terms of reference matter. And by the time of the Great Crash on Wall Street, the UK still hadn't got out of its post-WWI depression starting 1920.

Neither in nominal nor real terms did Great Britain's domestic economy recover its WWI peak before the late 1930s. Whereas the US got stuck on Walton Mountain only in 1930, the Great British Depression was very much longer and very much greater.

It could now prove very much worse again. Economists on both sides of the Atlantic agree. But whether they get to reverse what passes for "austerity" or not, they're likely to get a surprise. Because fixing our post-war bust will prove very much worse for very much longer than they fear. The war being that war between debt and depression fought by ever-easier credit since the late 1990s, and still in its sniper's nest firing zero rates at savers and debtors today. A war which expert economic advisors have only just spotted.

[mcjocky1]

Yes basically true but remember in early 1921 the effect of the "surplus 2 million" the effect upon the labour pool within Britain regarding the number of males available for work (statistics did not show the number of wounded, gassed, limbless that were NOT available for work) there were some 1,209 single women to 1,000 men aged between 25 to 29 according to the 1921 census figures, and following on from these figures in 1931 50% of these women were still single, and indeed 35% of them never married within child bearing age. The similarities with today however are numerous, but one seems constant is the financial effect from the USA, then it was the payment to said country plus some rather unfair settlements made through treaties and deals made that cost the UK the loss of some valuable landmass in the far east and caused major resentment from China but also from smaller nations that felt aggreived with some settlements made. Today we have the effect of the fallout from the collapse of the USA housing market which cost us dearly and IMO led to major losses from our banking sector at what turned out to be the wrong time, but off course this applies to more nations than us. On a personal basis, I paid into a pension scheme during my working life, but now that the time to reap the benefit of this is here, I am told that the claimed projected figures and the actual payout are miles apart, and indeed some have paid in more than they will ever get returned, this not just efects me but my whole family. As they say "you ain't seen nuthin yet"