As economies around the world face up to the “perfect storm” slowly building around us, with various “crunches” lethally combining their woes, the word recession is on everyone’s lips.

Does the past tell us anything we ought to know? Here is a list of the five worst slumps of the past century in rough order of magnitude. They may provide some sort of comparison, but we should remember that the current episode may have several years to run:

1 1929-33: Great Depression 11,000 of America’s 25,000 banks closed and number of unemployed rocketed. Result: global depression

2 1989-93: The savings and loans crisis More than 700 lenders failed. The crisis cost more than $160bn. Result: recession

3 Now: Collapse of US sub-prime mortgage market This has spread financial panic worldwide. Result: unclear

4 1980s: Latin American debt crisis The flow of international capital to region dried up, leaving massive debts. Result: global economy weakened

5 1973-74: Secondary banking crisis Slowdown led to three-day week in Britain. Result: recession

Source: Times Archive

So what is the state of the U.S. economy right now, given that shares are down around 20pc from October peaks?

Car sales are at a 10-year low, with General Motors’ shares selling at levels last experienced in the 1950s. GM, Ford and Chrysler may just be running into liquidity crises as cash flow fades, according to Wall Street sources.

With the climate change bandwagon running strongly, it will take time to shut down the 4×4 factories and increase output at plants producing smaller cars. Profits will fall as a result.

Housing starts have fallen by half from their January 2006 peak. The National Association of Home Builders’ index is at an all-time low. Inventories of unsold houses remain high, with foreclosures rising.

Most of the foreclosures and price falls are centered in California, Nevada (especially Las Vegas) and Florida.

Average prices in Manhattan continue to rise, driven in part by Europeans and others. Considering that a euro buys around $1.60 worth of property in New York, this must be a bonanza for cash-rich Europeans.

Last week’s jobs report was generally in line with expectations, essentially bad, but not cliff-falling territory.

Non-farm payrolls dropped by 62,000 in June, and earlier reports of lost jobs were revised upward by 52,000.

Since December, non-farm payrolls are down by 438,000. The unemployment rate remains at 5.5pc, not particularly high by historic standards.

A mixed picture then. Not as healthy as one might expect, but not the worst-case scenario either.

However, with the credit crunch bill now forecast to reach $1.6trillion, the outlook may be blacker than many realize.

The American investment bank Goldman Sachs, which is currently enjoying a “flight to quality” in its business, believes that America will lead Britain and Europe out of the credit crunch.

In many ways that’s a statement of the obvious since the U.S. economy is usually nine months to a year ahead of its transatlantic rivals/partners. And whereas Ben Bernanke at the FED and the Government in Washington have pulled out all the stops to limit the damage, Britain and the eurozone have been slow to react and have concentrated their fire on the dangers of inflation.

David Viniar, Chief Financial Officer at Goldman’s said, “March was the low point up until now, but if I try and predict the future, I am likely to be wrong.

“Do I think we are through? No, I don’t, but I think there is a lot behind us. Now there is less concern about systemic liquidity risk. People are focused individual investments and credit.”

The real danger now appears to be inflation, driven by oil and food prices. That would be reduced by a worldwide downturn. Experience tells us though, that once inflation sets in, it’s a long hard slog to get rid of it, simply because the remedy is recession itself.

George Soros, the man who famously “broke the Bank of England” in 1992, has given an interesting interview to a British newspaper.

“This is a period of wealth destruction. The people who make money will be few and far between. There will be a lot more money lost than made.

“I think this is probably more serious than anything in our lifetime. I think the dislocations will be greater because you also have the implications of the house price decline, which you didn’t have in the 1970s, so you had stagflation and transfer of purchasing power to the oil producing countries, but here you also have the housing crisis in addition to that.”

In other words he believes that the United States and Britain are facing a recession of a scale greater than both the early-1990s and the 1970s.

In the UK will be hard hit, he says. “House prices have risen over the years and are further away from sustainable than in practically any other country, in terms of household indebtedness and the relationship of house prices to incomes.

“This is going to be compounded by the fact that the financial industry weighs more heavily on the economy than in other countries, because London is the centre of the global financial system, and you have the unfortunate condition that the Bank of England is bound into inflation targeting, and is not in a position to lower interest rates until you have an economic slowdown.”

However, “It’s much better than the straitjacket sterling was in when I broke the Bank of England. The ERM would have been abandoned even if I had never been born.

“As a hedge fund manager, I do not claim to be serving the public interest. I am in the business to make money,” he says. “It’s a difficult point for people to understand and there’s a general attitude when they see people profiting to say that markets are immoral, or making money by speculating is immoral.

“It’s really the job of the authorities to set the rules, and there are times when some people break the rules or engage in improper activities, like the sub-prime mortgages. The impact fell particularly heavily on black and Hispanic minorities.

“It is a scandal, and I think you can blame Greenspan for not regulating the mortgage industry. But that’s very different from speculating in government bonds or financial instruments, and that’s a difficult point to get across, but I feel very strongly. Markets play a very useful role and they are amoral, not immoral.”