Right now, today, the whole world is very frightened about the whole economy of the world right now. It’s one of the worst since the Year 1932 Great Depression that strikes the world. It may become one and now the ball is in the US. In the Great Depression, when over three years the economy shrunk by nearly half and unemployment reached 24%.Although the current stock market has a long way to go to match the Great Depression’s collapse but still the world need to do something about it. Current economic measures are still far cheerier than of the Great Depression. When Depression strikes, the whole nation had virtually no safety net for the needy and no regulation of banks. Government officials then were reluctant to rescue distressed players in the market. It can that worst.

Historian Bryant Simon of Temple University, director of American studies said:” It is a very similar process to the Great Depression, because what you have is people not spending enough money,” said Debt-ridden consumers and troubled banks are toxic to a consumption-driven economy”, he said.

“It is not as severe as it was,” Simon said. “But if the banks are not going to lend money, you can’t get the economy back in gear. What you have is people not spending enough money.”

The United States although had always struggled through periodic and painful downturns during its history but bounces back everytime too. But during that Great Depression, it was so terrible and deep and broad that it sparked dramatic action to change the rules of the market. The current credit crunch may test the theory or maybe the history again.

The late economist Hyman Minsky said capitalist systems tend to “constantly leverage up with more debt,” noted former Fed economist Tim Yeager, who was one of Minsky’s students and is now a finance professor at the University of Arkansas.

“Credit becomes weaker, loans become worse and worse and risk grows,” Yeager said. “It is like a Ponzi scheme.”

For both stocks and homes, the game could go on as long as prices kept rising. We all have to really save up for the upcoming financial storm coming ahead, right at us directly.

Despite similarities, most experts don’t think the 2008 crisis will lead to a full replay of the Depression.

But Yeager, the former Fed economist, said the worst may still be to come.

“There is a big storm brewing.”