I think most of us have some sense of concern over the state of the economy at present. Over the past few months, the problem has shifted from merely being an issue affecting banks to an issue affecting us all, whether this is because of dropping house prices, soaring interest rates, or the unavailability of mortgages.
Perhaps you have swopped Waitrose for Lidl, or maybe like me you will have found that Sainsbury’s Value bran flakes are actually pretty good. Maybe you’ll have been thinking for a while that Pret a Manger don’t put enough pickle on their cheese sandwich, and you enjoy not only putting on as much pickle as you like, but also varying between Branston pickle and mustard pickle? History tells us, however, that we are not experiencing a new phenomena (du du, di du du)*.
In 1929, a very similar thing happened in the USA. Almost 79 years ago, in October 1929, the New York Stock Exchange collapsed. This occurred after a period of prosperity, “the Roaring Twenties”, not unlike the way things were in London in 2006/2007.
The human effect of the Wall Street crash is well documented, and from reading about the Great Depression I really hope it doesn’t come to this for us – but let's not lose sight of the fact that over the past few years in the UK alone repossession rates have risen – for example a recent 2008 forecast is that repossessions will be 23% more than in 2007. This means around a hundred families a day.
To find out more about what happened back in 1929, there is a documentary on The Business Channel this week. Tune in to Sky channel 547 at 20:00 on Thursday 9th October 2008 (repeated again at 23:00 the same day, and at 10:00, 14:00 and 17:00 on Friday 10th October). For more information on the channel and to see the other business related content that is on offer, visit http://thebusinesschannel.com
Meanwhile, time will tell how Gordon Brown compares to Herbert Hoover, as well as what effect (if any) forthcoming elections in the US and maybe here too will have.
* I see these strange creatures every time I say the word “phenomena” – Kermit the Frog and Sandra Bullock – see here – we’ve got to have something to smile about in these hard times.
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