July 17, 2010
What's the difference between the Great Depression and Inflationary Depression that Obama is leading the US?
Great Depression of the 1930′s had many causes. I learned that the main cause was a stockmarket crash and structural flaws in banks(overleveraging?) encouraged by bad monetary policy similar to what happened this decade, there was also a drought during that time that ruined agriculture. Well of course I don’t think they printed as much money then as the fed is printing now. So how is it different from the depression America is going in?
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Comments on What's the difference between the Great Depression and Inflationary Depression that Obama is leading the US?
Economist believe that the deflation in the early part of the depression is in part what make it so bad. Prices fell as much as 10% a year. There was no unemployment benefits then and initially the government tried to balance the budget by cutting spending and they did not intervene to save the banks until later. The FED could not print money because we were on the gold standard until 1933. In almost all respects the actions of the government and the fed now is the oppisite of what they did in in the early part of the depression.