Is the Second Great Depression looming?
Exactly ninety years ago, on October 24, 1929 (also, incidentally, on Thursday) the Great Depression began in the USA (at the same time striking Canada, Great Britain, France, and Germany).
Among the reasons for the beginning of the Great Depression are called:
— lack of money supply;
— erroneous monetary policy of the FRS;
— margin loans (margin debt);
— Adoption of the Hawley-Smoot Tariff Act, which introduced high customs duties on imported goods.
Does nothing ring the bell?
This is the exact situation in the USA today!
Liquidity crisis, insane Fed regulatory policy, unprecedentedly high level of margin loans (for trading on the stock exchange), bubbles on the stock exchange bursting with devastating consequences.
And then, and now the number of homeless people living right on the streets has risen dramatically.
By the way, at the beginning of the Great Depression, unemployment was also formally “record low” (about 3.2%) — as well as now. And then rose to 23.6%.
And six months after the onset of the depression, then-President Edward Hoover made a statement, “Although the disaster happened just six months ago, I’m sure that the worst is over, and with continued joint efforts we will quickly overcome the recession. Banks and industry are almost unaffected. This danger has also safely passed. ”
Harvard Economic Society wrote on November 2, 1929, “… although stocks have plummeted, we believe that this decline is a temporary one and not the beginning of an economic recession that will lead to a prolonged depression.”
“Gentlemen, you are sixty days late. Depression is over. ” Herbert Hoover, responding to a delegation that requested a public works program to accelerate economic recovery, June 1930.
“We are nearing the end of the fall phase in the process of depression.” Harvard Economic Society, November 15, 1930
Everyone (as well as now) assured that nothing terrible was happening and soon everything would be settled down.