I'm looking at a table of data published in 1931 by the National Industrial Conference Board that shows that wholesale prices in the US declined 28.6% from July, 1929 (which is when the depression started in the US) to July, 1931. It shows similar figures for every European country.
In fact, the decline in commodity prices preceded the Great Depression. Crude oil's high in the 1920's was on October, 1926; coal, December, 1926; copper, March, 1929. Yet they continued to fall - from December, 1929 to July, 1931, crude oil fell 81.69%; copper, 56.74%, but coal only 6.88%.
The Great Crash was preceded by the Great Deflation (of land and commodity prices) and the Great Contraction (of the money supply), but all three continued for several years - that's what made the Great Depression "great."
I haven't studied the rebound in commodity prices yet but expect that to some extent it was due in part to government stabilization programs and devaluation of the currency caused by going off the gold standard.
That's why I don't have a lot of faith in charts - things happen for a reason, e.g., today's move in gold prices is due to a planned Russian sale. |
