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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 455.37+3.1%4:00 PM EST
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To: TobagoJack who wrote (76367)7/14/2011 9:59:54 PM
From: carranza2  Read Replies (2) of 220065
 
Das Pater Tenebrarum Horribilus is brilliant:

"People have lately begun to worry that the authorities are about the repeat the so-called 'mistake of 1937'. The myth that the depression became worse due to a withdrawal of fiscal and monetary stimulus in 1937 is one of the most enduring next to ideas like 'FDR ended the depression' and analogous memes. One can however not deduce points of economic theory by attempting to interpret historical data. One must proceed exactly the other way around: if one wishes to understand economic history, one must interpret it in light of a correct economic theory. The data of economic history can otherwise be used to defend just about ANY position.

There is in any case a period of history that seems far more applicable to the Fed's current dilemma - the fiat money supply inflation under the French revolutionary assembly in the late 18th century. Similar to Bernanke today, the revolutionaries were 'puzzled' why their attempt to create 'economic stimulus' by printing money only seemed to work for ever shorter periods of time, while the unintended consequences became worse and worse. This did not keep them from trying however, and in the end they managed to destroy two currencies and an entire economy. They had become addicted to monetary heroin, with predictable results."
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