1929 ECONOMIC DEPRESSION
>Article #102684 (102698 is last): >From: firstname.lastname@example.org >Newsgroups: sci.econ >Subject: Re: 1929 ECONOMIC DEPRESSION >Date: Wed Feb 3 00:12:26 1999 >On Tue, 02 Feb 1999 19:16:51 GMT, chrisyoon@SoftHome.net wrote: >>What were the major causes of the 1929 economic depression which >>had initially started in the US before spreading to other major >>economics at that time? >There are countless books on the subject - see you library. You might >look for a small, readable one by John Kenneth Galbraith entitled THE >GREAT CRASH - 1929. Galbraith has the advantage of having been there. >Be certain not to miss the importance of the *collapse of confidence* >in deepening and prolonging the depression.
JCT: In GRACE AND MORTGAGE by Bishop Peter Selby, Bishop of Worcester, ISBN 0-232-52170-0, on page 116, he notes: > "as Galbraith remarks, higher interest rates, it is hoped, "will >curb inflation;" These comments of Galbraith illustrate why, although >the raising of interest rates is the weapon against inflation chosen >by those who profit by it, it is also clear that as a method it >cannot finally work. John Turmel, a Canadian civil engineer and >campaigner against usury, has in two long articles brought algebra, >plumbing and poetry to bear on the task." JCT: Just as I've proven Galbraith absolutely wrong on the effects of interest, I would also suggest that you could get a better understanding of the Depression is you were to follow our discussions of Carroll Quigley's Tragedy and Hope:
>The historical importance of the banker-engendered deflationary >crisis of 1927-1940 can hardly be overestimated. It gave rise to a >conflict between the theorists of orthodox and unorthodox financial >methods. >The bankers' formula for treating a depression was by clinging to >the gold standard, by raising interest rates and seeking deflation, >and by insisting on a reduction in public spending, a fiscal surplus >or at least a balanced budget. >These ideas were rejected totally, on a point by point basis, by >the unorthodox economists, (somewhat mistakenly called Keynesian). >The unorthodox theorists sought to restore purchasing power by >increasing, instead of reducing, the money supply and by placing it >in the hands of potential consumers rather than in the banks or in the >hands of investors. >When the economic crisis began in 1929, in Germany the crisis brought >to a head the latent dispute over orthodox and unorthodox financing >of a depression. >"This "deflationary gap" is the key to the twentieth century economic >crisis and one of the three central cores of the whole tragedy of the >century. JCT: To understand the mechanics of the 1929 Great Depression, it is important to understand how the unorthodox financial policies in Germany managed to generate full employment while orthodox financial policies managed to keep America in dire poverty and unemployment. This will be covered when we start our analysis of Quigley's works later this month. If you want to know the answers, join us there but in a nutshell, the depression was simply caused by a reduction in a purchasing power so that all that was produced could not be purchased.
>From: Dan Parker <email@example.com> >Newsgroups: sci.econ >Subject: Re: 1929 ECONOMIC DEPRESSION >Date: Wed Feb 3 12:27:37 1999 >Eric de Mare in A Matter of Life or Debt studies the domino effect of >the sudden calling in of investors short term credit lines. JCT: Which boils down to reducing the purchasing power by reducing the money supply by calling in loans. Quigley actually agrees with Social Credit's Douglas on many relevant points.
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