To: Mike M2 who wrote (10285 ) 12/5/1997 4:05:00 PM From: Mike M2 Respond to
More stuff from Patterson's "The Great Boom & Panic" But why did the inflation take place? British economist Lionel Robbins wrote in his book "The Great Depression" "The answer seems to be that it was the direct outcome of misdirected management on the part of the Federal Reserve authorities-an error of management,however,which Englishmen at any rate have no right to speak of with reproach, for it seems almost certain that it was carried out very largely with the intent to ease our(the British) position. By 1927 the (British) position was one of great danger. International assistance was sought. And in the summer of that year,partly in order to help us, partly in order to ease the domestic position, the authorities of the Federal Reserve System took the momentous step of forcing a regime of cheap money. A vigorous policy of purchasing securiies was initiated. The policy succeeded. The impending recession was averted. The London position was eased. The reflation succeeded.Production and the stock Exchange took on a new lease on life. But from that date on,according to all the evidence,the situation got completely out of control. By 1928 the authorities were thoroughly frightened. But now the forces they had released were too strong for them ...Velocity of circulation, the frenzied anticipation of speculators and company promoters, had now taken control. With resignation the best men in the system looked forward to the inevitable smash." Lionel Robbins " The Great Depression" pp.51-54 I just love books don't you Pete.? Note the remarks of Robbins-an economist of the Austrian school of thought are similar to Greenspan' remarks in 1966 which I have cited a url in a post about a week ago for those who are interested (not many i guess -g-) click on my name or look for it at gold-eagle.com it's the Fame block. BTW Pete In the spring of 1929 Paul Warburg one of the fathers of the Federal reserve System warned that in the speculation were not curbed a crash and a depression would likely happen see John K Galbraith's "The Great Crash 1929 p.72 ho ho ho Mike
