The economical effect of economic depression (Writing about unpredictable)
Nassim Nicholas Taleb has said that "if we would predict "Black Swan"(1), we cannot call that thing as "Black Swan". So the description of "Black Swan- theory" is that this thing cannot be predicted.
The economical effect of economic depression is one of the most twofold things in the complicated structure of the business. The disease is always following the boom, and the reason for that is that the growth of economics cannot continue forever. Sooner or later demand would be ended because people have everything.
And that means they don't need new merchandise. This is the thing, that causes depression in economics, and even the worldwide economical areas would face economical depression when they are filled by the merchandise. Then starts the thing, which is called as economic depression or decline. In that period the bankruptcies are common things, which would cause mass unemployment and that kind of thing would be very hard to control.
What is the difference between economic collapse and economic depression?
The thing that makes the difference between economic depression and economic collapse is the speed of the effect. If there is a large number of bankruptcies in the area, and the speed of an increase in the number of unemployed is very high, that can cause very large-scale political and economical effects.
When we are thinking about the case, that the economical depression is on the door, that causes situations, that people would take their money to safe. This means that the curves, which are showing the ability to correspond to the payments would start to turn down. And that thing causes panic, which would increase the effect of economical depression, but depression doesn't continue forever, and then there would be the boom sooner or later.
But when the boom begins that means that there would be the companies, that would be dumped with money. Also, currencies, what are used in operations in that area would get "air" in their value. This means that the real value of the company would be only a couple of percent, about the value, what is noticed in the stock marketing. So the economic depression removes that extra-value, and it also removes unhealthy businesses and companies from the marketing area.
Economic Darwinism and "Black Swans" can affect more than we expected in some economic areas. The key element and major detail of the "Black Swan" theory are that Real "Black Swan" cannot predict. And only surprisingly appearing case could fill the description of "Black Swan", what is the unpredictable but possible effect.
That thing is called "Economic Darwinism". Only companies that are wealthy and which revenue generation model is working can survive in the economical depression. Boom causes that people are establishing companies, which are working as an example of the sub-contractors for one single company. And if that company would fall, that means that also sub-contractors would face the same thing with their customers.
One of the problems of economic depression is if that thing would happen in the time, what is predicted by a large number of investments, that thing can cause more effective things. Things like "Black Swans" like suddenly started pandemics can cause catastrophe to tourism, and the thing, what makes this effect so destructive, is that "Black Swans" are hard to predict, and there is the possibility that a large number of investments are made in that business just before "Black Swan" or the very uncommon but still possible thing start to effect.
What is the effect of economical depression, if that is targeted to the only source of the incomes? And the second question is, where those areas find the next income, and people who are living in those areas and whose entire know-how is connected to that the thing, what has been the only pylon for the economy in some region. Where they are finding the new source for incomes?
The places and areas, where tourism is the main source of income is the problem that the entire economy is orbiting tourism. That means that there is a possibility that the entire area would turn to "ghost town" when the bankruptcies would destroy the entire economics in some areas. This is the problem in one-sided economical politics. If all incomes to the area come from a single source, that means that if that thing can cause that entire area must start to look for a new source for their income.
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