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Page added on December 3, 2015

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The Greatest Economic Collapses In History

The very first major economic collapse in recorded history occurred in 218-202 BC when the Roman Empire experienced money troubles after the Second Punic War. As a result, bronze and silver currencies were devalued. As HowMuch.net depicts in the video below economic collapses date back thousands of years. While many countries today still feel the effects of the most recent Global Financial Crisis, it is important to note that economic troubles are not unique to the present-day, but rather date back to some of the oldest civilizations.

Crisis by Type

While no two crises are exactly the same, economic collapses can be categorized into the following types:

  • Fiscal: inability of the government to finance its regular activities

  • Credit: reduction in the general availability and accessibility of loans

  • Financial: value of financial institutions or assets suddenly drop

  • Currency: doubt as to whether a country’s central bank has enough reserves to maintain the country’s fixed exchange rate

  • Economic: country experiences sudden downturn brought on by a financial crisis

  • Hyperinflation: extremely rapid period of inflation, usually caused by fast printing of money

  • Supply Side Shock: unexpected event that changes supply of product, resulting in a sudden change in price

  • Speculative Bubble: spike in asset value with a particular industry caused by exaggerated expectations of future growth

  • Stock Market Crash: sudden decline of stock prices across a large part of the market

The first collapse that occurred in the Roman Empire in the year 202 BC would be classified as a currency collapse. 235 years later, the Roman Empire experienced a financial crisis, caused by the decrease in land prices thereby making difficult for borrowers to pay back loans. As a result, interest loans from the wealthy became scarce.

Below is a look at some instances in which each of the other seven types of crisis above were experienced either globally or by a specific country.

Fiscal: The European debt crisis has been ongoing since 2009 when Greece, Portugal, Ireland, Spain and Cyprus had trouble repaying their government debt.

Credit: The Crisis of 1763 began in Amsterdam with the collapse of Leendert Pieter de Neufville and spread to Germany and Scandinavia.

Economic: From 1050-1100, Europe experienced economic decline, mainly due to the Great Invasions. This economic collapse ends in the 12th century with innovations in agriculture and textiles.

Hyperinflation: From 235-285 AD, emperors in the Roman Empire devalued currency rather than make unpopular budget cuts.

Supply Side Shock: In 1970, the world’s major industrial countries entered into an energy crisis, with countries facing substantial petroleum shortages, real and perceived, as well as elevated prices.

Speculative Bubble: After several years of a booming internet industry, stocks began to sharply decline in 1999, affecting major economies, including U.S., Germany, Great Britain, and Italy.

Stock Market Crash: The Wall Street Crash of 1929, or Black Tuesday, was the most devastating stock market crash in the history of the U.S.

Surviving Collapses

Despite the devastating effects throughout time, economies were able to recover from multiple collapses. For instance, the Roman Empire experienced currency and hyperinflation crises over five centuries while various countries in Europe have endured a number of crises over the last millennium. Below is a list of countries ranked by the amount of crises survived per country.

  • 1 crisis: South Africa, Israel, Mexico, Indonesia

  • 2 crises: India, Chile, Thailand, New Zealand

  • 3 crises: Australia, Canada, Japan, Brazil, Ukraine, Latvia, Estonia, Lithuania

  • 4 crises: Argentina, Andorra

  • 5 crises: China, Russia, Romania

  • 6 crises: Algeria, Morocco, Libya, Tunisia, Sweden, Norway

  • 7 crises: Finland

  • 8 crises: Ireland

  • 9 crises: Macedonia, Albania, Bosnia and Herzegovina, Turkey, Bulgaria, Serbia

  • 10 crises: Croatia, Switzerland, Germany, Croatia, Cyprus, Slovenia

  • 11 crises: Austria, Greece, Netherlands

  • 13 crises: Spain, Italy, Portugal

  • 26 crises: United States

With only 239 years of existence as a country, the United States has experienced double the number of crises as Spain, Italy, and Portugal, which are much older societies. This equates to approximately one crisis every 9 years! Over time, the United States developed a boom-to-bust economic cycle, commencing with the Panic of 1819 when a depression was caused by bank failures. These cycles vary with time and severity. Given the strength of the U.S. economy and sophistication of its capital markets, the U.S. is able to have shorter cycles by effectively adjusting policy when the economy expands and contracts. Under this cycle theory, one would expect the next U.S. economic collapse to occur in 2025, probably much sooner.   

Patterns of the Past

When the Industrial Revolution began in Europe in the 18th and 19th centuries, timing between economic collapses became notably shorter. Instead of having over 100-200 years of crisis-free periods, the 19th century began to see a sharp decline in the length of time, with a crisis occurring approximately once every decade. While the length of time has varied between collapses, it is evident that economic collapses became not only more frequent, but also more widespread. The first instance of a global crisis was experienced across Europe and the U.S. in 1873-1879 in which multiple countries experienced a worldwide price recession called the Long Depression. Over one hundred years later, stock markets around the world crashed during Black Monday, beginning in Hong Kong. Progress in technology and telecommunications has created greater accessibility among countries in the present-day. As a result, the ripple effects of events, both good and bad, spread faster and are sometimes unavoidable.

zerohedge



29 Comments on "The Greatest Economic Collapses In History"

  1. makati1 on Thu, 3rd Dec 2015 6:42 am 

    And the race is on….

  2. Hello on Thu, 3rd Dec 2015 6:54 am 

    Hihi.

    zerohedge. That’s certainly a crisis on its own.

  3. Davy on Thu, 3rd Dec 2015 6:57 am 

    Some things to ponder about modern collapse. It “IS” global and it is a compression and convergence of all of these collapse descriptions above. I say “IS” because this is a process that started years ago and now is gaining momentum. The best way I can describe it now is a combination of singularity and “Eulers disk”.

    This collapse will be global and all-inclusive and it will be a systematic bifurcation with random decay of vital human and natural supports forcing a catastrophic break to a lower level of human activity and population. I say catastrophic because our system is irreversible and unmanageable. There are no options other than uncontrolled descent to an unknown point with multiple converging negative feedbacks with climate, economy, and social decay. The reason we don’t see it is because we are frogs in a pot being brought to a boil.

    “1. Singularity”
    Mathematics
    2. In mathematics, a singularity is in general a point at which a given mathematical object is not defined, or a point of an exceptional set where it fails to be well-behaved in some particular way, such as differentiability.”
    “Wikipedia”

    or

    “Euler’s disk and its finite-time singularity”
    “H. K. Moffatt”
    “It is a fact of common experience that if a circular disk (for example, a penny) is spun upon a table, then ultimately it comes to rest quite abruptly, the final stage of motion being characterized by a shudder and a whirring sound of rapidly increasing frequency. As the disk rolls on its rim, the point P of rolling contact describes a circle with angular velocity”

  4. JuanP on Thu, 3rd Dec 2015 8:48 am 

    Maybe I am too stupid or ignorant, but I can’t make any sense of your comment, Davy. Can someone else please simplify Davy’s salad for me if they understand what he was trying to say?

    I don’t see anything momentary, unique, or special about what’s going on. Humans and its predecessors have been breeding unsustainably and destroying the environment since before we were human, it is a consequence of our animal nature. It is what all animals do to a degree. This issue has been getting worse gradually over millennia and it is reaching its inevitable conclusion. Simple! LOL

  5. Anonymous on Thu, 3rd Dec 2015 9:05 am 

    It is energy, not money that is the fundamental basis for all economic activity. Energy in the form of food to power a human body, energy in the form of fuel to develop advanced supply chain networks, and energy in the form of electricity to allow a degree of complexity in an economic system that would not otherwise form.

    Without cheap energy, almost the entire populace gets thrown back into the a lifestyle that’s between now and the middle ages, depending on the amount of energy that is available. This is a fact drawn from physics that no shifting of money will stop.

    If the decline is slow enough, it will allow us to respond aggressively by redistributing our labor through the free market towards a lower complexity economy where everyone is functionally a lot poorer.

    The only real silver lining to this as compared to the present is that it will dramatically cut down on migration from other parts of the world to the United States because we’re physically separated by a large distance from other areas of the world. In addition, we will be protected to a certain extent from China and Russia because force projection of militaries is also highly dependent on fossil fuels being available, for both direct (motors) and indirect reasons (supporting assets).

    The storm-clouds are starting to form on the horizon for what will turn into a category 5 hurricane on economies.

  6. Boat on Thu, 3rd Dec 2015 9:50 am 

    During the US great depression Unemployment reached 25%. Out last recession unemployment reached almost 11%. A more positive way to look at it would be even at the worst of times Most of the citizens kept working.

  7. steveo on Thu, 3rd Dec 2015 10:51 am 

    Boat,

    That 11% number is the U3. The U6 is more like the way unemployment was calculated in the 30s. The U6 was closer the 18% at the height of the last rescission and is still around 10% during the “recovery”.

  8. Rodster on Thu, 3rd Dec 2015 11:03 am 

    I agree that this time is TOTALLY DIFFERENT because of globalization. Back then when countries and systems collapses the collateral damage didn’t spread out throughout the globe. Granted they didn’t have the instant-on technology we have today but if the Romans collapsed it didn’t take out the world.

    Today you can see the opposite. A small insignificant Nation like Greece wasn’t allowed to default on it’s debt of around 600-700 billion Euros. And when there was speculation of whether or not they defaulted the stock markets around the world became unhinged.

    Back track to 2008 when the global eCONomy momentarily collapsed, Hank Paulson and Ben Bernanke both said if the TBTF Banks were not bailed out, the global system would have shutdown and there would have been tanks rolling in the streets of the US to restore order and Martial Law would have been implemented.

    The world is 20-100X worse off today than in 2008 because the world from East to West ran up their credit cards to the tune of around $250-350 trillion from 2008 just to keep this Ponzi scheme going. When the SHTF arrives I have little doubt it will be financial armageddon.

    China which is supposedly the second largest eCONomy in the world is repeating the same mistakes that brought on the 1929 great depression.

    http://brucewilds.blogspot.com/2015/12/chinas-veiled-economy.html

  9. Rodster on Thu, 3rd Dec 2015 11:08 am 

    “steveo-That 11% number is the U3. The U6 is more like the way unemployment was calculated in the 30s.”

    Economist John Williams from shadowstats.com puts the real unemployment rate between 23-26% which is still depression like numbers.

    You can get a quick average just by looking at the number of citizens who are out of the workforce which currently is around 95 million vs 320 million living in the US. Keep in mind that there is a certain number of those workers not counted who really can’t work because of health and age and therefore would not be counted anyway.

  10. penury on Thu, 3rd Dec 2015 2:11 pm 

    As many commentators have said: This will not be a collapse in the traditional thought. This crash will be slow ongoing and could last for many,many years, Today is the best it will be for a long time. Slowly,slowly everything will degrade. I know a lot of people will not believe in deflation until it swallows them, but it is real and it will change everything.

  11. makati1 on Thu, 3rd Dec 2015 7:27 pm 

    penury, I hope you are correct, but I don’t see that ‘slow’ decline anywhere. The system we live in is so interdependent and has so many weak links today that anyone of them could tip the domino that ends it all and very quickly.

    I think we have been thru the ‘slow’ stage and the speed is building. The financial powers-that-be are running our of corks and band-aids. I see the ‘word as we know it’ gone before 2020. 2025 at the latest. I hope you are preparing.

  12. makati1 on Thu, 3rd Dec 2015 7:33 pm 

    Anon, “…we’re physically separated by a large distance from other areas of the world.”

    Really? What will 100,000,000 extra Mexicans do to your plans when it gets too hot and dry in Mexico to live?

    Not that America is not already building it’s own personal hell, as I outlined not too long ago. Drugs, mental illness rampant, obesity, cancers, diabetes, guns, racial warfare, police state repression, religious warfare(coming soon), greed, hate, ignorance, etc. ALL part of the FSA.

  13. Anonymous on Thu, 3rd Dec 2015 7:43 pm 

    I really fail to see much difference in the first four ‘crisis’ types. They are all more or less very,very slight variations on the same thing. I guess the writer felt the need to pad the list to make his article look more interesting that it actually is.

    He doesnt even seem to know what a speculative bubble is. Speculative bubbles in and of themselves, are not exactly a ‘crisis’. And a crisis for who exactly? The winners probably think a S.B. is the best thing that ever happened to them. All the losers will have differing opinions of course. At least until everyone starts heading for the exit that is.Investors(suckers) who lose money on dodgy investments or questionable expectations could be a called a ‘crisis’ I suppose, if YOU’RE the one losing a lot of money. For anyone else that didn’t get suckered in, life goes on…

  14. Davy on Thu, 3rd Dec 2015 7:52 pm 

    Anon, I see our global system as a bubble of no return. We are the bubble and when it burst “Katy bar the door”

  15. BC on Thu, 3rd Dec 2015 10:54 pm 

    As for the points about the unemployment (U) rate, it’s arguably more instructive to discuss the situation in terms of labor utilization, or in today’s case labor “underutilization” in terms of labor share of GDP, including hours worked, real wages and after-tax purchasing power, and the share of debt-induced productivity gains realized (or not) by those dependent upon subsistence from earned income.

    In this context, were the labor force to have continued growing at the rate prior to 2007, the U rate would be 12-13% instead of 5%. Had the labor force grown at the rate of population, the U rate would be 9-10%.

    The point is that demographics, excessive debt, energy and debt costs of energy extraction, and now the prohibitive costs of “health” care (growing at twice the rate of final sales and at ~20% of GDP) are exerting a debilitating cost on the capacity of labor share of output to subsist (and private firm’s ability to deploy labor at a profit), let alone grow, which is a permanent, structural drag on demand.

    The US no longer creates net new full-time, private-sector employment per capita at breadwinner compensation after tax, medical insurance costs, and debt service.

    Real growth per capita of final sales/GDP is no longer possible.

  16. Davy on Fri, 4th Dec 2015 1:30 am 

    BC said “The US no longer creates net new full-time, private-sector employment per capita at breadwinner compensation after tax, medical insurance costs, and debt service.
    Real growth per capita of final sales/GDP is no longer possible.”

    BC is any economy doing that or capable of that? If they are is it not through comparative advantage in a global system? It is likely, said economy that is will not be allow soon as the global economy crashes.

  17. makati1 on Fri, 4th Dec 2015 2:22 am 

    According to the world bank, only about 30 out of the 180 countries in the world had a declining per capita income as a percentage of GDP between 2011 and 2015.

    The US had an average annual income/GDP growth rate of 1.6% per capita.

    The greatest increase was in South Sudan at 30.9%.
    China 6.8%.
    India 6.1%.
    Even the Philippines at 4.4%.

    http://data.worldbank.org/indicator/NY.GDP.PCAP.KD.ZG

  18. marmico on Fri, 4th Dec 2015 5:04 am 

    Real growth per capita of final sales/GDP is no longer possible.

    Bullshit on Real Final Sales to Domestic Purchasers.

    https://research.stlouisfed.org/fred2/graph/?g=2Olz

    And bullshit on Real Final Sales of Domestic Product.

    https://research.stlouisfed.org/fred2/graph/?g=2Olr

    So many retards and such little time.

  19. JuanP on Fri, 4th Dec 2015 6:44 am 

    BC, there are few places in the world still experiencing real economic per capita growth. They are also fewer and fewer with every passing day. This is a natural consequence of overpopulation and resource limits. We are reaching the end of growth, and per capita growth will end even sooner with a growing global population. The point you made about the USA applies to most of the rest of the world, too, though as Mak pointed out above, there are still some places experiencing economic per capita growth.

  20. JuanP on Fri, 4th Dec 2015 6:47 am 

    Marmi, I wonder what will happen to you and where you will be in a few years. I believe you are in for a lot of trouble. I wish I could believe in a better future like you do, but my understanding of human nature doesn’t allow me to. I envy your optimism!

  21. Boat on Fri, 4th Dec 2015 7:10 am 

    JuanP,

    Marm just looks at facts. You should try it. Optimism has nothing to do with it.

  22. Davy on Fri, 4th Dec 2015 7:11 am 

    Mak, look around where your listed Asian countries are heading. They are clearly in a nose dive. Your wonderful P’s are following China down. India is following China down. Most of this Asian growth has been malinvestment, excess capacity industrial capacity, and cancerous development of already grossly over populated Asian countries in an overpopulated Asian region. I stand by my comment and have to laugh when you quote the World Bank negative or positive per your purpose.

  23. makati1 on Fri, 4th Dec 2015 7:40 am 

    Dream on Davy. Your mind doesn’t see reality, just wishes.

  24. makati1 on Fri, 4th Dec 2015 7:42 am 

    JuanP, there are a lot of scared sheeple on here that refuse to take off their blinders and rose colored glasses and put the Imperial Koolaid down. That big 2X4 of reality is really gonna hurt.

  25. JuanP on Fri, 4th Dec 2015 7:47 am 

    The USA is going down, too. No country in the planet will be spared. Most of American growth has been malinvestment like suburbs, highways, airports, and all kinds of counterproductive shit. It is the same everywhere in the world. The USA is overpopulated, too, and is like a malignant tumor attempting to metastasize. The same applies to people everywhere. I recommend some serious treatment ASAP!

  26. JuanP on Fri, 4th Dec 2015 7:51 am 

    Boat, if you were smart or educated like Davy, I would love to pick a fight with you, but you are stupid and ignorant on top of delusional, and I don’t waste my time on stupid. Arguing with you is boring, so I will ignore you. You could never be fun like Davy is, he’s got brains!

  27. Davy on Fri, 4th Dec 2015 8:02 am 

    Juan, we are both smart but we are ignorant too. Personal attacks are a slippery slope to distortions and lies. This is why I have asked the Makster for 2 years now to just moderate his message. That’s all, why is that so hard. It is so hard for the Makster because he likes it.

  28. JuanP on Fri, 4th Dec 2015 8:21 am 

    Davy, Of course we are all ignorant. Anyone who learns enough knows that that all one person can know is but an insignificant fraction of what is known, not to mention what we all ignore. Also, I know I have forgotten most of what I learned in the past, too. So, what I know now is but an infinitesimal part of what could potentially be known.

    The more knowledgeable one is, the more aware of one’s ignorance. Our ignorance is infinite when compared to our knowledge.

  29. Davy on Fri, 4th Dec 2015 8:24 am 

    Great Juan, let’s use ignorance as our starting point for our battle of ideas without the superlatives and the personal attacks.


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