Would it concern you if the Fed caused the Great Depression?

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Would it concern you if the Fed caused the Great Depression?

PostBy: lsayre On: Tue Mar 26, 2013 10:17 pm

This one was posted by me in another thread, but I feel this needs its own thread, so I'm re-posting it here so it can be properly discussed:

Here is Federal Reserve Chairman Ben Bernanke's exact quote from his speech given at Milton Friedman's 90th birthday party in the year 2002:

"Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna [Schwartz, Friedman's coauthor]: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."

The true implications of this are staggering. How many Americans needlessly starved to death and suffered and toiled and struggled through better than 12 years of the Great Depression, because the Federal Reserve caused it?
lsayre
 
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Re: Would it concern you if the Fed caused the Great Depression?

PostBy: jpete On: Tue Mar 26, 2013 10:23 pm

How many needlessly died because the government forced farmers to turn crops under and forced businesses to go out of business or have people turn in all their gold?
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Re: Would it concern you if the Fed caused the Great Depression?

PostBy: snuffy On: Tue Mar 26, 2013 10:50 pm

And many think the Euro's action in Cypress can't happen here! Beware folks!!
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Re: Would it concern you if the Fed caused the Great Depression?

PostBy: Lightning On: Tue Mar 26, 2013 10:59 pm

I know people, relatives as a matter of fact that think our economy is on a path to doom. That our paper dollars will become worthless and the stores will go ravaged barren, and a "great apocalypse" will ensue.. I call these type the "gloom and doom" ers.. But what do I know.. nothing... :lol:
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Re: Would it concern you if the Fed caused the Great Depression?

PostBy: jpete On: Tue Mar 26, 2013 11:13 pm

Your paper dollars have been worthless since 1913. :)

You only accept them because the government puts a gun to your head. ;)
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Re: Would it concern you if the Fed caused the Great Depression?

PostBy: lsayre On: Wed Mar 27, 2013 6:17 am

The method by which the Federal Reserve caused (and then sustained) the Great Depression was to first massively expand the money supply (causing the roaring 20's) and then massively remove money from circulation. This brought the worlds greatest nation, with more fully functioning factories, more productivity, more natural resources, more food production, and more energy than the rest of the world combined at the time to its knees. We lacked nothing but money.

Virtually the exact same thing had happened only a few decades earlier when silver was demonetized and the bi-metal money standard (of silver and gold) was terminated and replaced with a purely gold standard. Since much of the wealth of the USA at the time was in silver, and there is a fixed amount of gold, the demonetization of silver contracted the money supply greatly, and people starved. The government at work again. One man who fought against the passage of the "gold only" standard was William Jennings Bryan, who's "Cross of Gold" speech on the Senate floor in 1896 is to this day considered the most famous political speech ever made. It ends with these words: "You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold."

Soon afterwards gold and the gold standard (through no fault of gold on its own, since gold was not re-valued to take up for the lack of silver) was declared a total failure and the Federal Reserve was born to cure the ills that "gold" had brought upon us. All because much to perhaps most of the wealth of the nation was demonetized, and this effectively contracted the money supply big time.
lsayre
 
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Re: Would it concern you if the Fed caused the Great Depression?

PostBy: lsayre On: Wed Mar 27, 2013 12:43 pm

Perhaps the major difference that I can see between the current economic malaise and the Great Depression is that in the current situation it is not the Federal Reserve that is contracting the money supply intentionally, but rather that the Wall Street and mega-bank types have made a relatively new toy call derivatives (side bets placed upon real economic transactions, often called insurance policies in an attempt to legitimize them) into a monster of proportions far exceeding not only the entire globes GDP, but also its net worth, and by factors of 100 or more. These highly leveraged time bombs can not possibly ever pay off, since all of the money on earth is nowhere near enough to cover all of the bets currently sitting on the gaming table. The Federal Reserve didn't create this derivatives mess, but as these instruments of financial destruction implode the Fed feels it is their task to cover for them by forever bailing out the various "too big to fail" players who sit at the gaming table. As these instruments of financial destruction implode they destroy wealth and contract the money supply. Ben sees this as being akin to what the Fed itself did in the very late 20's and right on through the 30's and into the 40's. He is therefore confident that the solution to what in reality is "Gambling Gone Wild" is to throw endless money at the gamblers. Is he right? Or is he merely fueling the fire of their addiction? And can their gambling binge go on forever with Fed assistance?

So far only a very tiny fraction of the gambling bets have imploded and required Fed covering....
lsayre
 
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Re: Would it concern you if the Fed caused the Great Depression?

PostBy: jpete On: Wed Mar 27, 2013 7:03 pm

The root cause is that the east creation of "money" made these things possible and the philosophy of "too big to fail" has assured at least SOME of these bets will pay off.

With hard money minus government intervention, no banker or other money handler would be foolish enough to take those bets and therefore wouldn't exist.
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Re: Would it concern you if the Fed caused the Great Depression?

PostBy: lsayre On: Wed Mar 27, 2013 7:32 pm

The last I heard was that the total of the derivative side bets placed worldwide now sits at somewhere between $600 and $1,600 trillion dollars, depending upon the source. The annualized GDP of all of the nations of the earth combined is around $70 trillion.
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Re: Would it concern you if the Fed caused the Great Depression?

PostBy: cabinover On: Wed Mar 27, 2013 9:07 pm

I think they did indeed cause the first depression. I also believe that at this point it really doesn't matter what happens, we're in a world of crap. No one has any responsibility anymore, including banks.

I will be debt free in two months with the exception of my mortgage. Guess they can take my house if they really want it but we'll be ready in not owing anyone other than the bank.
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Re: Would it concern you if the Fed caused the Great Depression?

PostBy: samhill On: Wed Mar 27, 2013 9:19 pm

Many moons ago I listened to a speaker that explained how the Gov. had to (I believe it was) take us off the silver & gold backing because foreign investors were taking much of our precious metals when they surrendered their cash & notes & demanding the silver & gold. We were fast losing our silver & gold standard & would never get it back, much as now they are buying our country. I probably didn't explain it well but at the time it made a lot of sense, I don't think they thought it would get to a depression stage but couldn't stop the run on banks. In any event the Fed never loses.
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Re: Would it concern you if the Fed caused the Great Depression?

PostBy: jpete On: Wed Mar 27, 2013 9:22 pm

cabinover wrote:I think they did indeed cause the first depression. I also believe that at this point it really doesn't matter what happens, we're in a world of crap. No one has any responsibility anymore, including banks.

I will be debt free in two months with the exception of my mortgage. Guess they can take my house if they really want it but we'll be ready in not owing anyone other than the bank.


Not so fast. There's that little matter of the quarterly rent check you need to send to your municipality. :)

You'll never be "debt free". Debt comes pre loaded on your Social Security card! :D
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Re: Would it concern you if the Fed caused the Great Depression?

PostBy: lsayre On: Thu Mar 28, 2013 7:46 am

samhill wrote:Many moons ago I listened to a speaker that explained how the Gov. had to (I believe it was) take us off the silver & gold backing because foreign investors were taking much of our precious metals when they surrendered their cash & notes & demanding the silver & gold. We were fast losing our silver & gold standard & would never get it back, much as now they are buying our country. I probably didn't explain it well but at the time it made a lot of sense, I don't think they thought it would get to a depression stage but couldn't stop the run on banks. In any event the Fed never loses.


This only happened during the Vietnam War, and is the reason why Nixon killed the last remaining vestage of the gold standard in 1971. By then the only remaining vestage of the gold standard was that foreign countries could ask for the payment of debts owed to them by the US Government in gold. Nixon said the foreign countries would have to accept FRN paper or nothing in payment of our debts to them (and he had the worlds most powerful military to make it stick). With that he unilaterally ended the Bretton Woods agreement that all of the civilized nations of the world had agreed to abide by. Talk about Executive Orders. That one was a whopper. The very root of the economic ills that befall the world can be traced to this Executive Order.
lsayre
 
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Re: Would it concern you if the Fed caused the Great Depression?

PostBy: samhill On: Thu Mar 28, 2013 8:19 am

I found this which is fairly close to what I had heard long ago, it started with FDR & lasted until Nixon & even then & maybe now the connected ones can still get U.S. gold. http://www.moonlightmint.com/bailout.htm
The other interesting thing which the speaker brought out was that the price of gas was going to skyrocket, people were going to once again move back to the inner city where the few jobs were & the less fortunate & undesirables if you would would be forced out to suburbs & rural, the trains would also make a comeback for long distance hauling & there would be mass transit in inner cities & everything one needs would be available without travel.
I have seen many different cities rehabbing many old classic buildings to condos & many bridges over railroad track being raised or the tracks being lowered to allow for the double stacked boxes.
samhill
 
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Re: Would it concern you if the Fed caused the Great Depression?

PostBy: waldo lemieux On: Thu Mar 28, 2013 8:34 am

Say it aint so, a republican did this awful :poke: deed. That guy saying "I am not a crook" is like some guy in a bar telling you he's got a lot of money....... :yearight:
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