"I told you guys, I've been saying this for years but nooooo....I'm a kook!"
Posted on 03/20/2008 8:05:21 AM PDT by kellynla
Despite the varied theories espoused by many establishment economists, it was none other than the Federal Reserve that caused the Great Depression and the horrific suffering, deprivation and dislocation America and the world experienced in its wake. At least, that's the clearly stated view of current Fed Chairman Ben Bernanke.
The worldwide economic downturn called the Great Depression, which persisted from 1929 until about 1939, was the longest and worst depression ever experienced by the industrialized Western world. While originating in the U.S., it ended up causing drastic declines in output, severe unemployment, and acute deflation in virtually every country on earth. According to the Encyclopedia Britannica, "the Great Depression ranks second only to the Civil War as the gravest crisis in American history."
What exactly caused this economic tsunami that devastated the U.S. and much of the world?
In "A Monetary History of the United States," Nobel Prize-winning economist Milton Friedman along with coauthor Anna J. Schwartz lay the mega-catastrophe of the Great Depression squarely at the feet of the Federal Reserve.
(Excerpt) Read more at worldnetdaily.com ...
History will repeat itself.
Wow. Can’t believe he admitted it.
Not one of us will remain alive.
Not one.
YIKES!!!
And the worst part about it is, I won’t be able to watch “American Idol” any more.
But, hey! It's nice Bernake will at least admit the Fed's dubious role.
He's better than Greenspan by a long-shot. Greenspan was the mouthiest and most over-rated chairman in the history of the Fed.
I have eternal life.
Wow. I guess Ron Paul finally talked some sense into him.
“Greenspan was the mouthiest and most over-rated chairman in the history of the Fed.”
AMEN!
I couldn’t agree more!
And Kermit the Frog Green-Spam is still running his mouth.
All I want to know is how much the little wife made off the Stock Market while hubby was head of the Fed...
Typical morning at the Greenspans, “Honey, are you gonna raise interest rates today?”
Thanks. I’ve been wondering for a while if it wasn’t the Fed that caused the Depression.
I am no economist but I believe the differentiator between the 1930’s and today is that the large global economy is more resilient to a total collapse than America’s smaller more fragile economy of yesteryear. This is not to say that current recession or inflationary pressures have no impact on the global economy, only that it has more inertia thus resiliency. To that end, should these pressures and other negative economic stimulus be so great as to overpower this inertia the result would be apocalyptic.
“Greenspan was the mouthiest and most over-rated chairman in the history of the Fed.”
Sounds like an accurate description of Bill Clinton as well.
This is still the Great Depression. It never ended and never will. It will outlive all of us.
While Friedman does a good job describing the proximate cause of the banking collapse that tunred a routine recession into a depression, the ultimate cause is the First World War.
Of the major industrial powers of the world in the early 20th Century, only the United States escaped the Great War without major damage. In Europe, entire nations were wrecked, governments had collapsed, national finances were in shambles and an entire generation of young men had been decimated. After the war, Americans essentially went back to work in what Harding called the “return to normalcy”, and national productivity soon picked up where it had left off before the war. This was in stark contrast to the situation across the Atlantic. While American output increased, European consumption decreased. Goods began piling up in American warehouses and prices began to fall. Record crops in the 1920’s and declining exports lead to a drop in prices and farms began defaulting. By the late 20’s, the rising number of farm defaults strained the small banks that held the mortgages, and soon those banks started failing. In a panic, Congress raised tariffs to protect American farms and businesses. The ensuing trade war caused exports to decline further, and America sank deeper into the Great Depression.
Democrats caused it.
Yes, but they had help. Just like 2008.
I don’t think we’ll see another “Great Depression”. We could see a very extended recession and extended Bear market though.
But there will be many sharp and fast Bear rallies like we’ve been seeing with these high volume 400plus days. Don’t get sucked in. “We be going back down”.
It didn’t originate in the USA. Its started in austria.
This is still the Great Depression. It never ended and never will. It will outlive all of us.
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lol
"I told you guys, I've been saying this for years but nooooo....I'm a kook!"
No Ron, you are NOT a kook. Unfortunately too many of your supporters were. Who could blame them for thinking that you were “one of them” as you kept leading them on by appearing on the “Alex Jones Show.”
The oppressive part is not learning from it.
bump for later.
The USSR had just had their revolution and it looked good to masses of people in western Europe.
First of all, the Federal Reserve System was invented by Wilson to make sure he could sell bonds to finance the upcoming war (remembering how difficult it was to sell bonds during the Mexican war). And to that extent it worked - the Fed was used to finance the US entry into WWI. But the US public was told that the purpose of the Fed was to protect people from bank failures. (follow the money).
The Federal Reserve System was then set up to have small banks put their loan reserves into bigger banks, that put their reserves into big city banks, that put their reserves into NY banks. The NY banks then suddenly had a bunch of cash, so they began to loan people up to 90% of the value of stocks they bought (stocks bought on margin)- and this alone fueled the rise of the NY Stock Market in the 1920's.
Next, the Fed tried to keep the spirit of the Gold Standard by limiting the total money supply to a multiple of the Gold held in the US. Unfortunately, they did not include in their calculations of the money supply the deposits in checking accounts (personal checking began to rise at this point), and thus they tripled the money supply between 1918 and 1926 while thinking they were still within the gold standard limits. The “inflation” was masked by the tremendous increases in productivity during this period of time. This excess money also added fuel to the stock market rise.
When the Fed economists discovered their mistake, they decided not to admit their mistake; but the Fed began reducing the money supply in 1926 to correct their money supply mistake. They slowly bought up the bonds needed by banks to make loans, thus reducing the money supply. It took 2 years to cause the “crash of ‘29”.
When Europeans saw the possibility of another war in Europe, they bought US Stocks and assets (a safer place), resulting in gold being shipped from Europe to the US. Following the gold standard, the Europeans reduced their money supply as gold was shipped to the US, resulting in their recessions. The US was then supposed to increase its money supply in response to the additional gold; but because the Fed was trying to correct its mistake, it kept the gold and kept tightening credit and reducing the money supply by buying the Federal Reserve Bonds needed by the banks to make loans. So Europe went into a depression 2 years before the US entered it.
When the Crash of ‘29 occurred, banks that had loaned money on stocks suddenly found themselves with worthless stocks - and thus legally bankrupt. Banks failed.
Finally, when so many banks failed, FDR tried every thing he could, both legal and illegal, to try to get the economy started again. BUT THE FED KEPT REDUCING THE MONEY SUPPLY THROUGH 1936!!!! THUS SABOTAGING FDR'S EFFORTS.
So the Great Depression — the World Wide Great Depression — was entirely the product of the Fed. And no more than 1% of the US population knows it generations later.
Sorry Bernanke, your apology is much too little and much too late.
yup
:)
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