Economic collapse is any of a broad range of bad economic conditions, ranging from a severe, prolonged depression with high bankruptcy rates and high unemployment (such as the Great Depression of the 1930s), to a breakdown in normal commerce caused by hyperinflation (such as in Weimar Germany in the 1920s), or even an economically caused sharp rise in the death rate and perhaps even a decline in population (such as in countries of the former USSR in the 1990s).
Often economic collapse is accompanied by social chaos, civil unrest and a breakdown of law and order.
There are few well documented cases of economic collapse. One of the best documented cases of collapse or near collapse is the Great Depression, the causes of which are still being debated.
Bernanke's comment addresses the difficulty of identifying specific causes when many factors may each have contributed to various extents.
Past economic collapses have had political as well as financial causes. Persistent trade deficits, wars, revolutions, famines, depletion of important resources, and government-induced hyperinflation have been listed as causes.
In some cases blockades and embargoes caused severe hardships that could be considered economic collapse. In the U.S. the Embargo Act of 1807 forbade foreign trade with warring European nations, causing a severe depression in the heavily international trade-dependent economy, especially in the shipping industry and port cities, ending a great boom. The Union blockade of the Confederate States of America severely damaged the South's plantation owners; however, the South had little economic development. The blockade of Germany during World War I led to starvation of hundreds of thousands of Germans but did not cause economic collapse, at least until the political turmoil and the hyperinflation that followed. For both the Confederacy and Weimar Germany, the cost of the war was worse than the blockade. Many Southern plantation owners had their bank accounts confiscated and also all had to free their slaves without compensation. The Germans had to make war reparations.
Following defeat in war, the conquering country or faction may not accept paper currency of the vanquished, and the paper becomes worthless. (This was the situation of the Confederacy.) Government debt obligations, primarily bonds, are often restructured and sometimes become worthless. Therefore, there is a tendency for the public to hold gold and silver during times of war or crisis.
Hyperinflation, wars, and revolutions cause hoarding of essentials and a disruption of markets. In some past hyperinflations, workers were paid daily and immediately spent their earnings on essential goods, which they often used for barter. Store shelves were frequently empty.
More stable foreign currencies, silver and gold (usually coins) were held and exchanged in place of local currency. The minting country of precious metal coins tended to be relatively unimportant. Jewelry was also used as a medium of exchange. Alcoholic beverages were also used for barter.
Desperate individuals sold valuable possessions to buy essentials or traded them for gold and silver.
In the German hyperinflation, stocks held much more of their value than paper currency. Bonds denominated in the inflating currency may lose most or all value.
During severe financial crises, sometimes governments close banks. Depositors may be unable to withdraw their money for long periods, as was true in the United States in 1933 under the Emergency Banking Act. Withdrawals may be limited. Bank deposits may be involuntarily converted to government bonds or to a new currency of lesser value in foreign exchange.
During financial crises and even less severe situations, capital controls are often imposed to restrict or prohibit transferring or personally taking money, securities or other valuables out of a country. To end hyperinflations a new currency is typically issued. The old currency is often not worth exchanging for new.
See also: Financial repression
Following Germany's defeat in World War I, political instability resulted in murders and assassinations of hundreds of political figures. (See: German Revolution of 1918–1919 and Kapp Putsch) Germany's finances were heavily strained by the war and reparations in accordance with the Treaty of Versailles. Unable to raise enough in taxes to run the government and make war reparations, the government resorted to printing money which resulted in great hyperinflation. One book on the hyperinflation, which includes quotes and a few first hand accounts, is When Money Dies.
The hyperinflation eventually ended, it cleared government debt at the cost of the citizens' savings. Some believe that the hyperinflation of 1923 has helped fuel the eventual rise of the Nazi party and the rise of Hitler to power in 1933. Economists, however, tend to attribute Hitler's rise to the Deflation and the Great Depression beginning in 1929. Paul Krugman concluded that the 1923 hyperinflation didn’t bring Hitler to power; it was the Brüning deflation and depression. Before 1929 the Nazi party was actually in decline with less than 3% of votes in the German federal election of 1928 (see election results of the Nazi Party).
While arguably not a true economic collapse, the decade of the 1930s witnessed the most severe worldwide economic contraction since the start of the Industrial Revolution. In the US, the Depression began in the summer of 1929, soon followed by the stock market crash of October 1929. American stock prices continued to decline in fits and starts until they hit bottom in July 1932. In the first quarter of 1933, the banking system broke down: asset prices had collapsed, bank lending had largely ceased, a quarter of the American work force was unemployed, and real GDP per capita in 1933 was 29% below its 1929 value. The ensuing rapid recovery was interrupted by a major recession in 1937-38. The USA fully recovered by 1941, the eve of its entry in World War II, which gave rise to a boom as dramatic as the Depression that preceded it.
While there were numerous bank failures during the Great Depression, most banks in developed countries survived, as did most currencies and governments. The most significant monetary change during the depression was the demise of the gold standard by most nations that were on it. In the U.S., the dollar was redeemable in gold until 1933 when U.S. citizens were forced to turn over their gold (except for 5 ounces) for fiat currency (See: Executive Order 6102) and were forbidden to own monetary gold for the next four decades. Subsequently, gold was revalued from $20.67 per ounce to $35 per ounce. U.S. dollars remained redeemable in gold by foreigners until 1971. Gold ownership was legalized in the U.S. in 1974, but not with legal tender status.
As bad as the Great Depression was, it took place during a period of high productivity growth, which caused real wages to rise. The high unemployment was partly a result of the productivity gains, allowing the number of hours of the standard work week to be cut while restoring economic output to previous levels after a few years. Workers who remained employed saw their real hourly earnings rise because wages remained constant while prices fell; however, overall earnings remained relatively constant because of the reduced work week. Converting the dollar to a fiat currency and devaluing against gold ensured the end of deflation and created inflation, which made the high debt accumulated during the 1920s boom easier to repay, although some of the debt was written off.
During the 1980s, the Eastern Bloc, which relied on a stagnant form of planned economy, experienced a decade-long period of stagflation, and eventual collapse from which it did not recover, culminating with revolutions and the fall of communist regimes throughout Central and Eastern Europe and eventually in the Soviet Union. The process was accompanied by a gradual but important easing of restrictions on economic and political behaviour in the late 1980s, including the satellite states.
The collapse in the USSR was characterized by an increase in the death rate, especially by men over 50, with alcoholism a major cause. There was also an increase in violent crime and murder. The Russian population peaked in the 1990s and is lower today than two decades ago, as the demographics of Russia show.
After more or less stabilizing after the disintegration of the USSR, a severe financial crisis took place in the Russian Federation in August 1998. It was caused by low oil prices and government expenditure cuts after the end of the Cold War. Other nations of the former Soviet Union also experienced economic collapse, although a number of crises also involved armed conflicts, like in the break-away region Chechnya. The default by Russia on its government bonds in 1998 led to the collapse of highly leveraged hedge fund Long Term Capital Management, which threatened the world financial system. The U.S. Federal Reserve organized a bailout of LTCM which turned it over to a banking consortium.
Since 2013, Venezuela has been suffering an economic crisis. It's the worst in Venezuelan history, caused by the economic policies of the president, Nicolás Maduro the successor of Hugo Chávez, the fall in oil prices and internal and external factors. Since 2014, Venezuela's GDP has been in recession, falling more 40%. The economy has collapsed, causing shortages of basics goods, economic downturn and hyperinflation since 2017. Also, there are drastic increases in the crime, corruption, poverty and hunger. Thousands of Venezuelans have fled to neighboring countries.
Some economists (i.e. the Austrian School, in particular Ludwig von Mises), believe that government intervention and over-regulation of the economy can lead to the conditions for collapse. In particular, Austrian theoretical research has been focused on such problems emanating from socialist forms of economic organization. This however is not a theory of economic collapse involving the breakdown of freely functioning financial markets; rather, the focus is on economic malfunction and crisis emanating from state control.
However, many Austrian economists also subscribe to what is called the "ABCT" ,or Austrian Business Cycle Theory. Economist Roger Garrison describes the bubble as merely a form of unsustainable boom (not a theory of all depression), as Mises and F.A. Hayek did, despite their disagreements on the exact workings of it. The essential part of the theory is that it is inherently unsustainable to try to manipulate monetary policy to boost both investment and consumption; usually through interest rate manipulation and bond-buying and such. The "boom" was created by "malinvestments," as Mises called them; business decisions that are bad investments and unsustainable in the long run because lowering interest rates by padding the supply of money and credit will only work in the short-term, but will ultimately collapse because the government can only hold down interest rates so long before fear of inflation kicks in (and deflation comes at the peak of the business cycle), or they go into hyperinflation (which is completely outside the realm of the ABCT).
In "The Science of Political Economy", published in 1905, Henry George argued that because land is a scarce resource, it is particularly subject to speculation. George uses "land" to refer to ownership of a right to use a resource. It includes mining, water, fishing, and timber rights, road and rail rights-of way, and some patents. Today, we would add to "land" such items as taxi medallions, telecommunications licenses and pollution "rights". Henry George followed his analysis with a remedy: eliminate all taxes except for a tax on land values. The "single tax", as it later became known, would invigorate the economy by breaking up large idle holdings, making land available to those who would use it. And it would suck the air out of speculative bubbles, damping the boom and bust cycle. Henry George died before the publication of the series of books, and parts of the book are nothing more than an outline, essays and lectures as noted on the cover page. He also stated that the expansion of the money supply, should be 1 percent or thereabout, to maintain healthy growth, and discourage saving, and encourage spending, and he wanted a debt free currency. (Our current currency, as of 1913 is birthed by debt).
Romanian American economist Nicholas Georgescu-Roegen, a progenitor in economics and the paradigm founder of ecological economics, has argued that the carrying capacity of Earth—that is, Earth's capacity to sustain human populations and consumption levels — is bound to decrease sometime in the future as Earth's finite stock of mineral resources is presently being extracted and put to use; and consequently, that the world economy as a whole is heading towards an inevitable future collapse, leading to the demise of human civilisation itself.
Georgescu-Roegen is basing his pessimistic prediction on the two following considerations:
Taken together, the Industrial Revolution in Britain in the second half of the 18th century has unintentionally thrust man's economy into a long, never-to-return overshoot-and-collapse trajectory with regard to the Earth's mineral stock. The world economy will continue growing until its inevitable and final collapse in the future. From that point on, ever deepening scarcities will aggravate social conflict throughout the globe and ultimately spell the end of mankind itself, Georgescu-Roegen conjectures.
Georgescu-Roegen was the paradigm founder of ecological economics and is also considered the main intellectual figure influencing the degrowth movement. Consequently, much work in these fields is devoted to discussing the existential impossibility of allocating Earth's finite stock of mineral resources evenly among an unknown number of present and future generations. This number of generations is likely to remain unknown to us, as there is no way — or only little way — of knowing in advance if or when mankind will ultimately face extinction. In effect, any conceivable intertemporal allocation of the stock will inevitably end up with universal economic decline at some future point.:253–256:165:168–171:150–153:106–109:546–549:142–145 
|url=(help). Heidelberg: Springer. pp. 83–161. doi:10.1007/978-3-642-28009-2_3. ISBN 9783642280085.CS1 maint: Extra text: editors list (link)
The following lists events from the year 2016 in Zimbabwe.ABCD line
The ABCD line (ABCDライン, Ēbīshīdī rain) was a Japanese name for a series of embargoes against Japan by foreign nations, including America, Britain, China, and the Dutch. It was also known as the ABCD encirclement (ABCD包囲陣, Ēbīshīdī hōijin). In 1940, in an effort to discourage Japanese militarism, these nations and others stopped selling iron ore, steel and oil to Japan, denying it the raw materials needed to continue its activities in China and French Indochina. In Japan, the government and nationalists viewed these embargoes as acts of aggression; imported oil made up about 80% of domestic consumption, without which Japan's economy, let alone its military, would grind to a halt. The Japanese media, influenced by military propagandists, began to refer to the embargoes as the "ABCD ("American-British-Chinese-Dutch") encirclement" or "ABCD line".
Faced with the possibility of economic collapse and forced withdrawal from its recent conquests, the Japanese Imperial General Headquarters began planning for a war with the Western powers in April 1941.Angola Telecom
Angola Telecom is a telecommunications and Internet service provider of Angola. Angola Telecom is an empresa publica, i.e. wholly owned by the Angolan state.
Subsidiaries of Angola Telecom include:
Infrasat, offering satellite telecommunications services.
Angola Cables, offering international access for data and voice.
TVCabo, offering broad band cable service for television and radio broadcasting.
Multitel, a portal offering a wide range of internet services.
ELTA, Empresa de Listas Telefonicas de Angola, an online telephone directory.
Movicel, offering mobile telecommunications services.Angola Telecom created the mobile phone provider Movicel as subsidiary, but holds since 2010 only a minority part of the shares of Movicel.
In 2010 Angola Telecom began a program of restructuring led by a team of international consultants. In 2014, Bloomberg reported that the company was on track to produce its first net profit in over 8 years. However, the economic collapse fueled by the devaluation of crude oil has likely erased any gains achieved thus far. *Bloomberg ArticleChinese property bubble (2005–11)
The 2005 Chinese property bubble was a real estate bubble in residential and commercial real estate in China. The New York Times reported that the bubble started to deflate in 2011, while observing increased complaints that members of the middle-class were unable to afford homes in large cities. The deflation of the property bubble is seen as one of the primary causes for China's declining economic growth in 2013.The phenomenon had seen average housing prices in the country triple from 2005 to 2009, possibly driven by both government policies and Chinese cultural attitudes. High price-to-income and price-to-rent ratios for property and the high number of unoccupied residential and commercial units have been cited as evidence of a bubble. Later, average housing prices in the country increased between 2010 and 2013,Critics of the bubble theory point to China's relatively conservative mortgage lending standards and trends of increasing urbanization and rising incomes as proof that property prices are justified.Community resilience
Community resilience is the sustained ability of a community to utilize available resources (energy, communication, transportation, food, etc.) to respond to, withstand, and recover from adverse situations (e.g. economic collapse to global catastrophic risks). This allows for the adaptation and growth of a community after disaster strikes. Communities that are resilient are able to minimize any disaster, making the return to normal life as effortless as possible. By implementing a community resilience plan, a community can come together and overcome any disaster, while rebuilding physically and economically.Crash Proof
Crash Proof: How to Profit From the Coming Economic Collapse is an investment book by American investment broker, Peter Schiff.Crisis in Venezuela
A socioeconomic and political crisis that began in Venezuela during the presidency of Hugo Chávez continued into the presidency of Nicolás Maduro. It is marked by hyperinflation, climbing hunger, disease, crime and death rates, and massive emigration from the country. The situation is the worst economic crisis in Venezuela's history, and among the worst crises experienced in the Americas.On 2 June 2010, Chávez declared an "economic war" because of the increasing shortages in Venezuela. The crisis intensified under the Maduro government, growing more severe as a result of low oil prices in early 2015, and a drop in Venezuela's oil production from lack of maintenance and investment. The government failed to cut spending in the face of falling oil revenues, and has dealt with the crisis by denying it exists and violently repressed opposition. Political corruption, chronic shortages of food and medicine, closure of companies, unemployment, deterioration of productivity, authoritarianism, human rights violations, gross economic mismanagement and high dependence on oil have also contributed to the worsening crisis. The contraction of national and per capita GDPs in Venezuela from 2013–17 was more severe than that of the United States during the Great Depression, or of Russia, Cuba, and Albania following the collapse of the Soviet Union. The annual inflation rate for consumer prices has risen hundreds and thousands of percentage points, while the economy contracted by nearly 20% in 2016. At the end of 2018, inflation had reached 1.35 million percent.Supporters of the government say that the problems result from an "economic war" on Venezuela and "falling oil prices, international sanctions, and the country's business elite"; critics of the government say the cause is "years of economic mismanagement, and corruption". In 2018, the United Nations High Commissioner for Human Rights (OHCHR) documented that "information gathered indicates that the socioeconomic crisis had been unfolding for several years prior to the imposition of these sanctions"; Michelle Bachelet updated the situation in a 20 March oral report following the visit of a five-person delegation to Venezuela, saying that the social and economic crisis was dramatically deteriorating, the government had not acknowledged or addressed the extent of the crisis, and she was concerned that although the "pervasive and devastating economic and social crisis began before the imposition of the first economic sanctions", the sanctions could worsen the situation. The New York Times says the Maduro administration was "responsible for grossly mismanaging the economy and plunging the country into a deep humanitarian crisis in which many people lack food and medical care". National and international analysts and economists have argued that the crisis is not the result of a conflict or natural disaster but the consequences of populist policies that began under the Chávez administration's Bolivarian Revolution, with the Brookings Institution asserting that "Venezuela has really become the poster child for how the combination of corruption, economic mismanagement, and undemocratic governance can lead to widespread suffering."The crisis has affected the life of the average Venezuelan on all levels. By 2017, hunger had escalated to the point where nearly 75% of the population had lost an average of over 8 kg (over 19 lbs) in weight, and more than half did not have enough income to meet their basic food needs. By the end of 2018, over 90% of the population was below the poverty line, and almost 1/10th of Venezuelans (3 million) had left their country. Venezuela led the world in murder rates, with 56.3 per 100,000 people killed in 2016, making it the third most violent country in the world.Cybergeddon
Cybergeddon (from tech. cyber-, lit. "computer"; Hebrew: Megiddo, extracted from Har Megiddo ("mountain of final battle") refers to cataclysm resulting from a large-scale sabotage of all computerized networks, systems and activities. It combines cyberterrorism, cyberwarfare, cybercrime, and hacktivism into scenarios of wide-scale internet disruption or economic collapse. Economic or industrial infrastructure could be targeted, such as banks or industrial control systems. Since 2012, the amount of Internet-based attacks and their complexity have increased."Cybergeddon is a possibility," FireEye CEO Ashar Aziz explained in an interview with Bloomberg: "Attacks on critical infrastructures such as the power grid or financial institutions could wreak havoc not just on United States economy, but in fact, the world economy."Doomsday Preppers
Doomsday Preppers was an American reality television series that aired on the National Geographic Channel from 2011 to 2014. The program profiles various survivalists, or "preppers", who are preparing to survive the various circumstances that may cause the end of civilization, including economic collapse, societal collapse, and electromagnetic pulse. The quality of their preparations is graded by the consulting company Practical Preppers, who provide analysis and recommendations for improvements.Fall of communism in Albania
The fall of Communism in Albania, the last such event in Europe outside the USSR, started in earnest on December 1990 with student demonstrations in the capital, Tirana, although protests had begun earlier that year in other cities. The Central Committee of the communist Party of Labour of Albania allowed political pluralism on 11 December and the largest opposition party, the Democratic Party, was founded the next day. March 1991 elections left the Party of Labour in power, but a general strike and urban opposition led to the formation of a "stability government" that included non-communists. Albania's former communists were routed in elections in March 1992 amid economic collapse and social unrest, with the Democratic Party winning most seats and its party head, Sali Berisha, becoming president.Freshly Squeezed (comic strip)
Freshly Squeezed was an American comic strip, written and illustrated by Ed Stein, also the cartoonist of Denver Square comic strip for the Rocky Mountain News. Freshly Squeezed began in 2010 — chronicling the life of an inter-generational family which has united after the economic collapse — and ended in October 2014.Kariba (District)
Kariba is a district and constituency on the shores of Lake Kariba in the Mashonaland West Province of northern Zimbabwe, along the border with Zambia. The constituency comprises 12 rural wards or municipalities in Kariba Rural, also known as Nyaminyami Rural District, and 9 urban wards in Kariba Town, the district capital. The district's total population was just under 60,000 in 2011. Kariba town was built to house the workers who built Kariba Dam, which was completed in 1960 to supply Zimbabwe and Zambia with hydroelectric power, and which gave rise to one of the largest artificial lakes in the world. The creation of the Kariba Lake led to a thriving fishing industry, but following Zimbabwe's economic collapse, Kariba became the least developed district in the country. Kariba is also the most isolated district in Zimbabwe, with no tarred roads as of 2002. The main economic activities are subsistence agriculture, fishing and subsistence hunting. The district, which includes Matusadona National Park, suffers from high levels of wildlife poaching and high levels of human-wildlife conflict.Piracy off the coast of Venezuela
Piracy off the coast of Venezuela increased during the crisis in Bolivarian Venezuela. The situation has been compared to piracy off the coast of Somalia, which was also caused by economic collapse. As Venezuelans grow more desperate, fears of increasing incidents and range of piracy have been reported. Venezuelan pirates often smuggle weapons, drugs and sex trafficking victims. Authorities have also been involved in piracy near the coast of Venezuela.Richard C. Duncan
Richard Duncan is chief author of the Olduvai theory, a prediction of rapidly declining world energy production. He has an MS in Electrical Engineering (1969) and a PhD in Systems Engineering (1973) from the University of Washington.
The Olduvai theory holds that the ratio of world energy production per capita, which he denotes by the metric e, will peak as the extraction rates of fossil fuels fall increasingly behind demand, causing catastrophic social and economic collapse, starting with massive electrical blackouts worldwide. He suggests that humans would eventually revert to a stone-age style of living after the majority of the world's population dies off over the coming century. In 1996, Duncan claimed that e had peaked around 1978. In 2000, the theory was revised to hold that the ratio would begin to decline around 2007. The peak was again revised in 2013 to have occurred in 2012.He bases his theory on the fact that a steep rise in global population and petroleum use almost parallel each other but population increases at a slightly faster rate than does energy use.
Duncan's research data, compiled in partnership with geologist Dr. Walter Youngquist, have become widely used resources for those studying past and current trends in oil production and depletion.Robots Will Steal Your Job, But That's OK
Robots Will Steal Your Job, But That's OK: how to survive the economic collapse and be happy is a book by Federico Pistono that was published in 2012.
The book, initially self-published by the author, was later picked up by publishers internationally and translated in six languages. It became a best-seller on Amazon.com and was covered in various publications such as the BBC, the Financial Times and Época.Trump Tower (Tampa)
Trump Tower Tampa was the name of an unfinished condominium project located in downtown Tampa, Florida. The construction of the towers was never started due to the economic collapse of the real estate market. The building would have been visible from the end of Bayshore Boulevard and Tampa General Hospital on the Hillsborough River waterline.
Ground was broken on March 2, 2006, and in July 2007 the foundation footings were drilled. In September groundwork was halted when instabilities in the bedrock were found. Pilot borings showed that the limestone in one area dipped far below that of the surrounding areas. Brownstone Partners Tampa, an investment group led by Robert Owens of OR&L Facility Services, acquired the property on June 20, 2011. St. Petersburg, Florida based Feldman Equities filed plans with the city in late July, 2015, for a very similar 52-floor tower on the same property.Vallvidrera Funicular
The Vallvidrera Funicular (both Catalan and Spanish:Funicular de Vallvidrera) is a 736.6-metre-long (2,417 ft) funicular railway in the Barcelona district of Sarrià-Sant Gervasi, in Catalonia, Spain. It connects Peu del Funicular station on the Barcelona–Vallès Line with the residential neighborhood of Vallvidrera, in the Collserola mountain range.
Opened on 24 October 1906 (1906-10-24), the funicular has played a key role in the development of Vallvidrera and is the main public transport access to this neighborhood. Although initially privately owned by Ferrocarril de Sarriá a Barcelona (FSB), it was transferred to the Catalan government together with the Barcelona–Vallès Line after FSB's economic collapse. Thus, since 7 October 1979 (1979-10-07), the funicular has been operated by Ferrocarrils de la Generalitat de Catalunya (FGC). In 1998, it was entirely rebuilt and upgraded to an automated guideway transit (AGT) system, including the introduction of new rolling stock.
The funicular is integrated as part of the Vallès Metro high-frequency commuter rail scheme. It runs at a basic interval of 6 minutes on weekdays, less frequently on weekends and public holidays, with a journey time of 2 minutes and 50 seconds (without considering any intermediate stops). Besides, it is entirely within fare zone 1 of the Autoritat del Transport Metropolità (ATM) fare-integrated public transport system for the Barcelona metropolitan area.Videnov Government
The eighty-second cabinet of Bulgaria also known as the Videnov cabinet was a coalition government in Bulgaria, led by the Bulgarian Socialist Party, which ruled from 25 January 1995 to 12 February 1997. The Socialist-led coalition government resigned after nationwide protests because of hyperinflation, banking crisis and economic collapse.