The Phaserl


GOLD & DEBT: The 1929 Great Depression vs The Next Great Collapse

by Steve St. Angelo, SRSRocco Report:

The situation Americans face in the future will be nothing like they have experienced in the past. While we have seen old footage and heard stories about the Great Depression (starting in 1929), we have no idea how bad things really were during the 1930’s.

At the time, approximately 25% of American population were farmers. Thus, when things really got bad, folks in the cities could move out and stay with their relatives on the country farm. This is not an option for most Americans today as only 2% of the population are farmers and ranchers (source).

After WWII, Americans left the farms in large numbers for the allure of the great life in the cities and suburbs. For decades, living in the city or suburb offered Americans a much easier way of life as the United States had plenty of cheap energy and resources to tap into.

Matter-a-fact, after the 1930’s Great Depression, U.S. oil production continue to increase for nearly 40 years:

Even though U.S. oil production declined some years (1930-1970), overall growth steadily increased in a linear fashion. However, the recent surge in U.S. oil production (2007-2015), mainly due to ramp up of expensive shale oil, moved up exponentially and will likely decline in the same fashion. This will have a profoundly negative impact on the U.S. economy and financial system.

Furthermore, the U.S. was able to pull itself out of the Great Depression due to the fact it was just starting to tap into its huge reserves of cheap, high EROI (Energy Returned On Investment) oil supplies.

For example, the massive Lakeview Gusher in California (1910) had an estimated EROI of 35,000/1:

Basically, for the one barrel of energy equivalent burned to drill the Lakeview Gusher, it provided 35,000 barrels of oil. Today, Shale Oil comes in at 5/1 and Oil Sands in Canada is about 4-5/1.

The EROI of U.S. Oil & Gas in the U.S. in 1930 was 100/1. This includes exploration and production. According to white paper, A New Long Term Assessment Of Energy Returned On Investment (EROI) For U.S. Oil & Gas Discovery and Production, the U.S. oil industry was finding 1,200 barrels of oil for each barrel of oil equivalent energy it burned in exploration. Today it has fallen to less than 5/1.

As the U.S. oil and gas EROI continued to decline, especially after 1970, the United States continued to thrive due to the Petro Dollar system and the ability to import high EROI from the Middle East and other oil exporting countries. Unfortunately, this is not a situation that will continue for much longer as the debt in the system has exploded.

Comparing U.S. Debt 1929 vs 2015

It’s quite interesting to see how much of a change has occurred since the Great Depression. While things were very bad for Americans in the 1930’s, the amount of U.S. public debt per person was very low versus today:

According to several sources, the U.S. population was 122 million in 1929 while total public debt was $16.9 billion. Thus, the average debt per American in 1929 was $139. Compare that to a population of 320 million and $19.4 trillion in debt at an average $60,625 per American today. Total U.S. debt per American is 436 times greater than 1929.

What is interesting about total U.S. debt is that after each World War, the total level of debt declined for several years. For example, after the end of World War I, total U.S. debt fell from $27.4 billion in 1919 to $16.1 billion in 1930 (source). This was also true after World War II when total U.S. debt fell from a high of $269 billion in 1946 to a low of $252.7 billion in 1949. Over the next several, as total U.S. debt continued to increase, there were a few years that experienced declines (1951, 1956 & 1957).

However, after 1957, there wasn’t a single year that total U.S. debt declined. It has continue to increase for the past 58 years:

I believe the reason total U.S. debt was able to decline after each World War and during a few years in the 1950’s, was due to the relatively high EROI of U.S. oil and gas. Moreover, as cheap domestic U.S. oil production peaked in 1970, oil imports had to increase to supply the ever-growing sprawl of the AMERICAN LEECH & SPEND SUBURBAN ECONOMY.

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3 comments to GOLD & DEBT: The 1929 Great Depression vs The Next Great Collapse

  • Craig Escaped Detroit

    Yes, the idea (reality) that we will be facing an even MORE harsh situation now, then what happened in the 1930’s is scary.

    We now have about TRIPLE as many people, yet only 1/10th the number of farmers/rural residential folks.

    Back in the 30’s, a LOT higher percentage of people grew their own gardens, raised chickens, rabbits, and did their own canning, and storing their own produce from the garden.

    One study I read, says that researches looking over the old census data, etc, estimate that about 6% of our population DIED as a result of the Great Depression lack of food.

    I think you may safely TRIPLE that percentage because of the fact that we have about 50 million Americans on Food Stamps, very few people have any experience maintaining a garden or preserving their harvests.

    If 1/3 of all EBT people die, that would be about 16 million. Looking at how many people live in cities and suburbs, there will be many who will die.

    When the economy crashes and JOBS are gone, and no PAYCHECKS distributed, it won’t make any difference even if you had $20,000 in CASH under your mattress because the stores will be empty, just like Venezuela.

    A lot of people will be successful to help each other, but there will be a larger number of “dog-eat-dog” crime, desperation, etc. Farmers and Gardeners will wake up to find their crops have been robbed.

    Farm & garden tools and supplies will be stolen. Grain bin contents, silo contents, fertilizer supplies, etc, will end up on the black markets and in people’s stomachs.

    Farmer families will be found murdered in their homes. Farms & Ranches will be the prime target of both criminals and government confiscations.

    I think the people with the BEST chances to be left alone, will be the smaller plots of land with just a few acres in rural areas where the size of the gardens will not attract any attention.

    If it gets bad enough, it may become important to grow “Stealth food”, stealth gardens, etc.

    Food plants as landscaping can be cleverly done.

    Wild foods can be helpful. Find those wild grape vines and throw a couple pounds of fertilizer on them.

    Don’t use anymore weed killer on those edible Dandelions, Plantain, Pigweed, Lambsfood etc.
    Plant CLIMBING beans, peas, etc, onto fences, etc.

    Grow food plants that people don’t commonly recognize.
    Sun Chokes-AKA Jerusalem Artichokes. (these grow from Florida to Canada, EASY to grow, very healthy, and gives a very decent harvest and resistant to most pests.)

    Turnips, potatoes, rutabagas, and other root crops MAY go unnoticed if you don’t plant them in obvious ROWS.
    Fruit trees, Nut trees, vines, etc. (Blueberry bushes, kiwi vines, and MANY others. Look on Ebay or Amazon for fruit seeds, trees, etc, and you’ll feel like it’s Christmas shopping.)

    Pay close attention to your growing zone and compatible plants.

    Few people live in areas that can successfully grow bananas, avocado, citrus or Loquat trees.
    The cool thing about those Loquat trees, is that they produce FLOWERS in the FALL, and give you RIPE FRUITS in the SPRING TIME!!! Exactly when NOTHING else is READY, you can have some fresh fruits.

    Another unusual, fruit tree NATIVE to North America, also grows from the deep south, to southern Canada, is the PAW PAW tree. (but the flowers are STINKY like ROTTEN MEAT, so keep them away from your house windows, but this amazing tree, does NOT need BEES to pollinate those deep red, rotten smelling flowers, because it attracts FLIES, beetles and hornets to pollinate them. SO if the bees are dieing, THIS tree will survive and produce its GOOD fruits.)
    These fruits are compared to a combo of pineapple-banana-vanilla pudding. You can use it as a perfect substitute for bananas when you make banana bread. You can crush the pulp and freeze it, or you can DEHYDRATE it.

    Why don’t we SEE these fruits in the markets? Is because they don’t transport very well.

    Growing OTHER foods that come back each year. Asparagus! and MANY others.

    OK. BE well, be CLEVER. Grow all that GOOD stuff.

    You can even make a SOLAR OVEN from aluminum foil (or the shiny insides of potato chip bags) and a CARDBOARD BOX. I’m not kidding.

    Google the words “solar oven” and then click IMAGES.

    • aa

      I have also read that millions died due to starvation during The Great Depression and I think your tripling of the six percent death toll is probably very conservative. With a few exceptions this generation is nothing like the generation that endured the great depression so the body count during an even greater and worldwide depression, like many are predicting, will be Biblical.

  • Craig Escaped Detroit

    PS. I forgot to mention this about the Paw Paw trees (besides the fact they are tricky to get them started).

    The leaves produce a chemical (perhaps it’s a natural oil?) that smells or tastes like DIESEL FUEL and prevents the DEER and other pests from eating the leaves and killing the tree!!!

    I was unsuccessful at growing these a few years ago, because I was STUPID and cheap, and did NOT buy enough garden soil, compost, etc, or dig a big enough hole and fill with enough GOOD dirt to get them started. And when they are tiny, they need to be protected from the normal UV rays will kill them until they get bigger.

    I’m gonna buy MORE of them next week, and get them started the RIGHT way.

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