Who really started the great depression. http://morganisteconomics.blogspot.co.uk/2012/11/the-curious-case-of-benjamin-strong.html
I don't know nothing to do with me. My email account is being bounced by spammers at the moment but I think my blog is clean. Maybe it was a java update or something? Has anyone else experienced this?
I thought it was that evil speculator, what was his name again, he shorted stocks and everything collapsed because of his selling stocks owned by hard working americans meanwhile he made $100 million in the process.
The whole speculation situation was only possible because of high debt from low interest rates. The move to hit monetary targets using expansion of credit created a decade of rebalancing budgets.
From DeLong's blog: NO, AMITY SHLAES HAS NO IDEA WHAT SHE IS TALKING ABOUT. WHY DO YOU ASK?: WTF!?!?!?!? WEBLOGGING Robert Gilbert: The Tormented President: Calvin Coolidge, Death, and Clinical Depression: About four months later [in January 1928], as the Federal Reserve Board prepared to curb wanton stock speculation, Coolidge made a statement to the press that stopped the Board in its tracks. This was largely regarded as the greatest single blunder of his presidency. On this occasion, he indicated--quite amazingly for the president of the United States--that⦠Whether the amount at the present time [of brokers' loans] is disproportionate to the resources of the country, I am not in a position to judge accuratelyâ¦. o far as indicated by an inquiry that I have made of the Treasury and so on, I haven't had any indications that the discount was large enough to cause particularly unfavorable comment⦠Coolidge's reassuring statement did not come until after the close of the market that Friday afternoon The next day there was an explosion of stock buying, making it one of the most active Saturdays in stock-trading history, The New York Times reported on January 8 that: Stocks were turned over on high volume on the New York Stock Exchange yesterday largely because of the enthusiasm caused by President Coolidge's statement that he saw no reason for alarm in the large expansion of brokers' loans⦠Not everyone, however, was quite so enthusiastic. When Hoover was told that Coolidge had made such comments about brokers' loans, he was incredulous, asking: "Did that man actually say that?" Had he known of a conversation between the president and H. Parker Willis, editor of the New York Journal of Commerce, [Hoover] would have been even more appalled. In this conversation, Coolidge had admitted that his personal view and his official views on brokers' loans were quite differentâ¦. [A]s an official representative of the government, he felt compelled to stand on information he received from a department of that government [i.e., Andrew Mellon's Treasury], even if he disagreed with it. Willis reportedly replied that if Coolidge had only indicated his concern, he would have had a great impact in curtailing 'an unwholesome speculation'. Coolidge's January 6 press conference remarks and the follow-up conversation with Willis are rather remarkable⦠------ Frederick Lewis Allen: Only Yesterday: The bull party in Wall Street [in the 1920s] had been still further encouraged by the remarkable solicitude of President Coolidge and Secretary Mellon, who whenever confidence showed signs of waning came out with opportunely reassuring statements which at once sent prices upward again. In January 1928, the President had actually taken the altogether unprecedented step of publicly stating that he did not consider brokers' loans too high, thus apparently giving White House sponsorship to the very inflation which was worrying the sober minds of the financial community⦠-------- Donald R. McCoy: Calvin Coolidge: The Quiet President: When in 1926 Professor William Z. Ripley of Harvard University drew his attention to the fact that pyramiding holding companies and rigging of stock markets threatened the United States with serious economic consequences, Coolidge was concerned. Yet searching Ripley's arguments, he could not find any justification for federal interventionâ¦. Coolidge's statement declared that brokers' loans were not excessive because they reflected steadily increasing bank deposits and the larger number of securities on the market. To give emphasis to his reassuring view, he allowed it to be quoted directly in the pressâ¦. A few days later H. Parker Willis, who was editor-in-chief of the Journal of Commerce, discussed the statement with Coolidge at the White House. The President indicated that his official view and his personal opinion were divergent. He said, "If I were to give my own personal opinion about it, I should say that any loan made for gambling in stocks was an 'excessive loan'." He continued by way of explanation: I regard myself as the representative of the government and not as an individual. When technical matters come up I feel called on to refer them to the proper department of government which has some information about them and then, unless there is some good reason, I use this information as a basis for whatever I have to say; but that does not prevent me from thinking what I please as an individual⦠------------------- Accurate history books should be required to have gold edged pages or 24k gold covers to get people to want to open them up. I'm looking at you Fed bashers.
I don't what you are arguing. But if you are saying it was as a result of speculation perhaps your right. But would all of that speculation and margin buying be possible if was not for the expansion of credit? That is certainly what created the over selling of derivatives in recent years with CDO's and credit default derivatives. A bubble that was bound to crash.
Seems to me that we should rather be discussing who prolonged it.Regardless of how it started,or any other for that matter,I think a discussion about how business cycle lows are prolonged would be more helpful.I don't think business cycles can be eliminated only muted.Lay mans point of view.