2022 Bayou recession

2022 Bayou recession
Date	11 November 2022 – December 2022
Location	Bayou Sector, especially Elarian nations.
Also known as	Panic of 2022
Type	Economic Crisis
Cause	Loss of value in the dimae, bank closures.
Outcome	Mass unemployment in Ela'r'oech, multiple layoffs and business shutdowns. Ela'r'oech sees a massive burst of Elarian progressivism in the forms of Momentum, a business boom, and art creation.

The 2022 Bayou Recession was an economic event involving a decline in usage and valuation of the dimae and the closing of numerous banks in Alaria and elsewhere in the Empire of Ela'r'oech. The recession began on 11 November 2022 and ended in December 2022. Attempts to stop the recession had not been successful by any business leaders or politicians in the Bayou Sector until Elarian Chancellor Shawn West's administration had issues treasury bonds and the recession seemed to come to an end.

Origins

Around early November 2022, many Alarians had begun to refuse the Dimae. An estimated of 5 local businesses had announced they would no longer accept the Dimae. This wasn't exactly a major issue at the time, however hindsight leads one to believe that this was a cause of the recession.

Additionally, banks had started to close afterwards due to the panic, so beginning the recession. Eventually, it was discovered that this was the case because one local business owner had embezzled Dimae, which led to a small panic as it had never happened before.

History

Initial panic (Mid-November 2022)

Starting on the night of 11 November 2022, many Alarians began to refuse to take the Dimae, instead using the US dollar. This would lead to a drop in value for the Dimae by 30%. This would also mark the first time in history that the Dimae was valued less than the United Elarian dollar. This drop in value for the Dimae would lead to five Elarian companies pausing all stock transactions. These companies include Dragon Studio, Firefly, Ela'r'oech News Source, Newmaker Studio, and Elaroland. This would lead to a small economic panic due to the aforementioned companies being among the highest traded in the Elarian Stock Exchange. This panic would then lead ACBIC Inc. to suspend all financial transactions on all of their websites including those owned by subsidiaries. The Bank of Dimae - an online bank for Alaria - would pause all transactions indiscriminately, leading to the Dimae's value to drop an additional 30%.

Throughout the night, this panic would lead to all companies in the Elarian Stock Exchange having their collective values dropped over 200%. This event would lead to the Bank of Dimae getting shut down permanently, leaving over Đ6,000 in worth. The Elarian government would use over Đ4,000 in assets to pay back all customers if they had any financial issues relating to the recession. The closure of the Bank of Dimae would lead to panic in other banking companies, leading the Bank of Alaria - a municipality-owned financial company - to pause all transactions indefinitely. Collectively, these two banks alone would layoff over 10 employees.

After the bank layoffs, it was projected that the Elarian Stock Exchange's traded businesses had then dropped nearly 350%. It was at that point that Ela'r'oech's Federal Department of Finances and Funds declared a national recession.

National recession (Late-November 2022)

In a moment of hope, the Dimae would be used again to sell many assets from each company, helping shoot its value back up 20%. However, companies were still going worthless, and it was clear at that point that it was highly unlikely that the momentum would stop. Firefly would end up selling most of its stock to its majority owner, which would lead to the value of other media companies plummeting.

The next morning, the government would issue stimulus checks for Đ3,000 to residents living in the mainland, however this did little to stop the recession from getting worse. Bankers - especially those who were former employees of the Bank of Dimae and the Bank of Alaria - were refusing to pay what was owed to their customers. Many workers in Elarian companies also began to quit their jobs, leading to a gap between those who are rich and poor to be much more noticeable.

On 12 November 2022, Elaroland and Elarian Sciences would shut down. A while after, Ramirez Works would also shut down. All three businesses closed permanently. Unemployment was recorded to be an all-time high in the mainland at 70% or higher, with prices increasing due to the previously issued stimulus checks. Even worse, citizens did not have the ability to actually cash out their checks because all of the banks in the nation were essentially financially frozen.

The recession was in full swing by 15 November, however early voting took place for the Elarian federal elections two days later. Along with these elections, a number of arts began to flourish in Ela'r'oech, most notably with Momentum.

While Elarian progressivism seemed to flourish by late November 2022, the recession wasn't getting much better. But it should be noted that in the last week of November 2022, there was a major increase in the value of the Dimae due to the release of the 2023 designs and the cultural impact. The West administration also announced in November that Treasury Bonds would officially become a form of government securities.

End of the recession (December 2022)

Treasury Bonds became officially legal tender on 1 December 2022, allowing citizens of Ela'r'oech who had reserved them to cash them out. This would lead to many bonds being cashed out and the value of the Dimae skyrocketing yet again, signifying a possible end for the recession. Additionally, the government of Ela'r'oech had issued stimulus checks to many of those affected. Eventually, Shawn West had also found the true cause of the recession, which led to an end of panic as multiple businesses returned to acting as normal. Of course, that is excluding those that had closed during the recession.

Causes

The leading cause of the recession is believed to be the widespread embezzlement of the Bank of Dimae in mid-to-late 2022. The embezzlement was found to be perpetrated by the owner of the organization. The discovery of this embezzlement is often credited to Shawn West and his administration as it was announced by West on 22 November 2022.

It has come to my attention that the cause of the recession is likely due to the bank of Dimae. The owner was embezzling money from our micronation. This proved his disrespect towards our home. Disrespect is the one thing I will not allow in this community. So please if anybody has any information on how he did it and possibly with who he did it with, we will have a better and safer community. We will continue to investigate this matter slowly and thoroughly, just know I will get it done, and thank you for your time.
— Shawn West, Statement on the Embezzlement Situation from the Bank of Dimae

International effects

The economic shock from the Elarian recession would end up causing shocks in Pontunia, with their currency, the dukaten, projected to lose value as well due to the recession. Additionally, there are expected shocks in Bushistan and Begon according to Ela'r'oech News Source, although it is likely that the projections in Begon are unrelated to economic panic and more likely due to inactivity.

On 12 November 2022, the Second Republic of Kamore officially changed its currency to the Dimae as it has had an ongoing mild recession. Pontunia also notably has been in talks to join LENS-ETU and, by extension, United Trade International since 11 November 2022. It is unknown if or when Pontunia will use the Dimae and if this will have an effect on their projections.

List of company closures

This is a list of all companies who have closed in the Bayou Sector following the recession, along with their listing on the Elarian Business Power Rankings at the time of closure.

Rank	Name	Industry	Employees (at time of closure)
2	Bank of Dimae	Commodities	8
17	Elarian Sciences	Science	2
20	Ramirez Works	Art	1
N/A	Locc LLC	Gaming	1
N/A	Uropa Zone	Geographic	2