The current financial crisis has brought trouble to families from USA to Asia.

As always the rich are getting off the hook by getting bailed out by the government while the middle class and the poor are the ones taking the full hit.

Foreclosure rates in USA are up 30% compared to last year and almost 300 000 homes in the US  got a foreclosure notice in February. Things are equally bad in UK – home repossessions are up 92% compared to the third quarter of 2008.

People who lost their jobs and who used to live from paycheck to paycheck are the first ones to lose their home – no income means not being able to afford mortgage payments. To determine how long you can sustain your current lifestyle without losing your home you should check out how to calculate how much F*CK YOU money you have.

Jobless people are forced to move out of their homes. The one’s with family and friends who are willing to take them in are in luck! There are however some people who have no other option but to live in tents.

Shanty Towns – Tent Cities of the 1930′s

Millions of people lost their homes during the Great Depression. Those who weren’t lucky ended up in Shanty Towns – tent cities built by the poor for the poor. At one point Shanty Towns or Hoovervilles as they became known later were home to more than 1 million Americans.

Tent Cities of Modern America

It might come as a surprise to a lot of Americans that just as during the Great Depression people who have lost their homes are once again flocking to live in tent cities. Here are a few pictures from a tent city in Sacramento, California.

If you are still not convinced that tent cities exist in modern America, take a look at this news report from BBC – the national TV station of Great Britain.

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Below is a graph of all the major stock market collapses in the 20th century – starting with the crash of 1929 and the Great Depression and finishing with the bursting of the .com bubble in 2000.

The graph shows that the usual bottom of a bear market has been about 50% lower than the preceding stock market high. The only exception is the crash of 1929 where stocks initially fell 47.9% but then dropped thanks to the Great Depression to about 90% of their initial value.

The interesting thing is that thanks to the current financial turmoil the S&P 500 has already dropped 48.5% from it’s high this year.

If history ever teaches us anything it seems to indicate that we are currently in a crossroad – is this the point where the markets will turn around or will we go on to see a second Great Depression?

Click for a larger picture

While no one can know for sure what will happen next, it seems that thanks to the unwillingness of banks to lend money, that the current financial crisis is turning into an economic crises that will bring on another Great Depression.

3 Facts about the Great Depression

• 25% of people were jobless.
• Food riots throughout the US – Grocery shops got looted because hungry people do whatever it takes to get something to eat.
• People who lost their homes lived in tents and erected camps near the White House in Washington to get relief.

What do you think – will we have another depression or will everything be OK soon?

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