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Pastimes : Book Nook -- Ignore unavailable to you. Want to Upgrade?

To: JF Quinnelly who wrote (178)	4/4/2001 9:35:22 AM
From: Ilaine	Read Replies (2) \| Respond to of 443

Sterilization appears to be something that is universally done and has something to do with exchange rates, which boggle my mind. imf.org Chris bought me a foreign exchange board game - we are all going to play it together and maybe that will help me "get" it. I am getting a lot of useful information from Peter Temin's "Lessons from the Great Depression." A lot of work has been done since Friedman and Schwartz' landmark "Monetary History of the United States," and some of their assertions have been refuted. Your assertion that the United States was not affected by events in England, France and Germany are refuted, too. He argues that the origins of the Great Depression have to do with deflationary policies deliberately pursued in all four countries due to then-believed principles of sound finance, but that's just the origins. I am only halfway through. I need to read something good about the collapse of the Bank of the United States - that may be the cataclysmic event in 1930 I am looking for. One point he made intrigues me. Published interest rates tell us only the interest rate of successful loans, loans which were accepted. They don't tell us the interest rates that were offered to less desireable customers which were rejected. If people have the expectation of deflation they may forego borrowing. This is consistent with what I am reading on the CFZ - people are saying, don't buy now, wait, the prices will come down. In a deflating economy, this is self-fulfilling. The more people wait, the more prices come down If you have money, deflation is good. If you own a farm, deflation of land prices is bad because that's what you use to get loans. And when we think of the misery of the Great Depression, the misery of the farmers is the worst. I never talked to my grandmothers about the Great Depression, and my parents were both born in the 1930's and didn't think anything of it.