Ask Michael Burke Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Ask Michael Burke

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: BGR who wrote (77036)	3/6/2000 1:54:00 PM
From: Freedom Fighter	Read Replies (4) of 132070

BGR, >>The Great Depression was largely an issue of faulty Central Bank policy which decided to drain liquidity at the wrong moment (under public pressure).<< This is a widely believed and reported fantasy. I suggest that if you ever have a lot of free time that you read the NY Times from that period. No one was worried about the crash because everyone believed that the Fed could inflate. In fact, in the weeks after the crash they were flooding the system with money. There was never any effort to drain liquidity in the months or years after. The money supply collapsed because of the credit contraction of mal-investments that accumulated during the boom. It can be argued that the Fed didn't try hard enough, much as some people believe Japan is not trying hard enough now, but I think the phrases "pushing on a string" and "liquidity trap" came into being for a reason. There weren't enough willing borrowers because the returns on capital were low and the perceived risks were very high. I wasn't there so I can't say for certain that the Fed of that time did everything they could, but the idea that they tightened or didn't try to inflate is totally false. Wayne

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next