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Politics : Ask Michael Burke
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To: Mike M2 who wrote (78150)3/20/2000 2:18:00 AM
From: Don Lloyd  Read Replies (2) of 132070
 
Mike -

lewrockwell.com

"The Rhyme of History
by Sean Corrigan

We have quoted before from the writings of Benjamin Anderson, Chief Economist at Chase Manhattan from 1920-37, spanning the period from the sharp post-WWI depression via the New Era madness and on through the Great Depression itself. Much of what he wrote in his masterful ?Economics and the Public Welfare? rings eerily true today.

A firm believer in what is now regarded as the Austrian school view that true capital can only be formed by abstinence from consumption and that bank credit is nothing but a temporary substitute for this, his contemporary writings in the prestigious Chase Economic Bulletin constantly warned against the seductive poison of easy money and railed against the Fed for enabling its provision to take place on what was then an unprecedented scale.

Writing of the 1924 credit expansion, he excoriated the Fed?s open market purchases of that year, saying:

?..this additional bank credit was not needed by commerce and it went predominantly into securities: in part into direct bond purchase and in part into stock and bond collateral loans. It also went into real estate mortgages??

?This enormous expansion of bank credit, added to the ordinary sources of capital, created the illusion of unlimited capital and made it easy for our markets to absorb gigantic quantities of foreign securities as well as a greatly increased volume of American security isuues.?
..."

Regards, Don
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