Yeah, no. Rich people having too much money isn't what caused the Great Depression. The creation of the Federal Reserve Bank, in 1913, caused the Great Depression. The banks were no longer bound by deposits. They could borrow money from the Federal Reserve. They allowed people to borrow money in the 1920s, and do whatever they wanted with it. The money was still backed by gold, but only on paper. Many people who borrowed this money, invested it in the stock market. This drove the market up to incredible heights. Then, in 1929, (and this has nothing to do with the stock market crash), a run on gold started, because many astute traders could see the increase in the money supply. So, in 1929, the discount rate was raised to 12%, which effectively cut-off money from the markets, and brought down the stock market, but the run on gold still continued. Raising the rate effectively started reigning-in the excess money. A contraction of the money supply is one of the most damaging things to a free market economy because labor contracts, and mortgages, and all sorts of other contracts, are based on a consistent money supply. When the money supply falls, then every other expense MUST fall, to maintain stability in the economy, but this can't be done because of contracts, as mentioned above. Not only that, but both wages and prices must fall, and this is very difficult. So the money supply was reigned in. Then in 1933, after Roosevelt became president, in March, gold was at such a shortage that the federal government was about to go bankrupt, because, at the time, gold was the only legitimate money in the US. At this time, the money supply had already shrunk by over 30%. Roosevelt felt he had no choice but to ban the ownership of gold. This would require every private citizen in the US to return their gold to the treasury. When all was said and done, even though the money supply had shrunk by over 30%, gold was then devalued another 40%, which demonstrated in real terms, how much additional money had been pumped into the economy. The Federal Reserve was created to stop bank runs, and ease credit during the brief recessions of the 1800s, which rarely lasted more than a year. Instead, it created catastrophic recessions which lasted over a decade in the 1930s, and the 1970, and arguably since 2008, today.
Actually, the creation of the Fed wasn't the ultimate CAUSE of the great depression, or any depression, rather it was and is a TOOL used to enrich a select few at the expense of all others. Basically depressions are but one part of the Fed induced "economic cycle." First, The Fed lowers interest rates to member banks, who in turn lower their consumer loan rates and relax lending standards. Businesses and people, that are otherwise unqualified, borrow money for projects that would be unprofitable or items that would be unaffordable without the easy money. As a result, businesses and people are in deep debt. Next, The Fed increases the interest rates to member banks, who in turn increase their consumer loan rates and tighten lending standards (because since they must pay higher rates, they need to be sure to lend to better credit risks). As a result, once profitable projects become unprofitable at the new higher interest rates, thus businesses decline to borrow and expand operations, or some, once dependent on the easy money, scale back operations, leading to layoffs. Some people, once qualified to borrow under easy money policy, are no longer qualified, so they can't borrow. Others that did borrow, now laid off from work, can't keep up loan payments leading to repossessions, dispossessions, evictions, and foreclosures. Because money for the vast majority of people and businesses is tight, demand goes down, while desire and need to sell off items, from manufactured goods and food to stock and real estate, vastly increases, leading to lower selling prices. In comes the rich: since prices have gone down, especially so for financial instruments and real estate, they snap up the remaining supply for pennies on the dollar. THAT is how the rich remain rich or get richer while the average Joe gets poorer during a depression. Further, those that control the Fed plan and execute booms and busts and the main reason why they "appear" to be randomized is because the Fed refuses to share its money policy plans with the masses in advance of their execution.
@@EnergeticWaves yes i was about to say that, the devaluation was temporary and discouraged ppl from buying gold and encouraged to sell. Once the ownership of gold was low, if became "rare" and its price boomed ever since.
@@macplatt6183 exactly. In summary: The rich buy the dip in the economy crises, and sell at tops. Also now they encourage pandemics for v4xine profits from directly selling to the governments (pfizer, j&j, moderna, etc). Its the best investment strategy and the worst scam in history lmfao.
Example: Person A invests his salary in a banks stock, forgoing instant gratification, and person B takes out a credit card with that same bank just because they wanted to buy stuff now, over time person B gives their hard earned money to person A in the form of interest; one pays interest to the bank, one earns interest from the bank (think of two half filled glasses of water with one pouring into the other). This goes for mortgages, car loans, student loans etc and it happens faster as time passes. Moral, get out and stay out of debt as quickly as possible, stop giving these people your money if you think they are so evil, stop buying things that you don't need with money that you don't have. The rich get richer in a recession because they educated themselves, worked hard, saved money, built their wealth and were then able to buy shares in companies that were now being sold at a discounted price, once the companies recover from the recession the rich make bumper profits, simple. Far from all were born into riches. Read books like 'The millionaire next door', 'Rich dad, poor dad', 'Total Money Makeover', 'Retire inspired' etc... Point is, educate yourself and stop being a victim, and rather than vilify these people, learn from them.
As you've said, that era is ill understood, and there's a lack of data on the subject. How do they even calculated total economic output at that time? But it's a well known that there was a real recession/depression in the 1870s, and it was not only american. It started in Austria I believed and affected many western countries.
I have recently discovered your Xtranormal vids, and frankly find you a very interesting voice in giving folks a clear and concise (albeit, from your perspective - but one I hope a lot of folks give an ear to) introduction to the subjects you choose. I was just busy introducing a few choice folks to your vids on Quantitative Easing, and noticed you just published this new vid. I love what you are doing here. You are making me think in new ways about these subjects.
The issue to the whole problem isn't the fact that people such as warren buffet or other super wealthy people don't get taxed the issue is that we aren't taxing them in the right area. The biggest tax that you will ever pay is EARNED INCOME look up Robert Kiyosaki he explains this. If you put money in savings and get interest or punch a clock at work you make earned income and uncle Sam can take as much as 50% of your salary. Rich people don't get taxed because their money comes from INVESTMENTS. Their real estate homes, apartments, stocks, bonds, options, futures. And they protect all of these assets by putting them into a trust which is tax-free. Wealthy are intelligent when it comes to money their not stupid. Because they know the laws and loopholes they will keep their billions and use tax write offs by lowering their income to being as much as a poor person.
I only blame big government. I never made more than 30,000K until a couple of years ago. Yet, I got a quarter million saved. I avoid debt like the plague. The only ones fighting for what I want is the Tea Party. More power to them. They're the only ones trying to shrink the size of government. More taxes and regulation=less freedom.
For those reading this exchange, Majlerin is touting the Keynesian line. This economic theory is the same one that caused the problem, the one that is perpetuating it. Keynesians told everyone that everything was just fine right up to the collapse, then said that no one could have predicted it. My point of view is the Austrian theory, which did in fact predict the crisis and explains why we are still in the dumps, 'because' of what the Keynesians are doing. More...
The quotes are from Herbert Hoover's acceptance speech for renomination for the Republican nomination in August 17th 1932. As FDR's Treasury Secretary stated, FDR continued and expanded Hoover's interventionist policies. FDR's policies were, in fact, devised by the Hoover administration.
If you've read the famous work of Friedman, his argument is that the contraction of the money supply was indeed the CAUSE for the depression. Not the crash, but the ensuing long depression And no, the contraction wasn't caused by "interventions that prevented liquidation", it was caused by the systemic bank failures and the recessive spiral. Friedman's point is precisely this: that the Fed needed to intervene to save the banks and provide credit. But it DIDN'T
Still more frequent than today ;) And that's "MAJOR banking panics". Minor banking panics, bank runs, were much more common than today. And from that same article: "panics were a substantial source of economic instability prior to the founding of the Federal Reserve"
Essentially, Friedman believed that that the Fed/government should have prevented bank failures by supporting them with loans, monetize debt by expanding the money supply; prevent firms from failing by bailouts, and keep wages high by liquidity injections by the Fed into the economy. Japan did all of this post 1990. The USA is doing the same. It doesn't work. Treating symptoms is not a cure.
FYI Google: " FDR's policies prolonged Depression by 7 years, UCLA economists calculate" But it was actually Hoovers interventionist policies that got it started. FDR made it worse.
"From 1869 to 1879, the US economy grew at a rate of 6.8% for real GDP and 4.5% for real GDP per capita, despite the panic of 1873. The economy repeated this period of growth in the 1880s, in which the wealth of the nation grew at an annual rate of 3.8%, while the GDP was also doubled." :"The highest decadal rate [of growth of real reproducible, tangible wealth per head from 1805 to 1950] for periods of about ten years was apparently reached in the eighties with approximately 3.8 percent."
"Perhaps the greatest modern champion of central economic planning was the 20th century English economist John Maynard Keynes. Keynes, who was a political socialist and for a time a central banker, advocated the idea that the government should play a large, active role in the economy. Among the consequences of Keynes' economic theories, whether intended or unintended, is the fact that Western economies today are characterized by large, central governments, central banks and massive debts."
Truth! Having said that, it doesn't make a fuck bit of difference because many of the plebs will still hate you regardless of what kind of rich you are.
For example a office building that was built specifically for mortgage brokers would have sold for a premium during the housing boom. When there is reduced demand for mortgages due to a burst bubble, the building could be converted to say a physical fitness firm. But not at a premium price. It must be liquidated to make financial sense. If the gov't props up the market costs of maintaining it resources are wasted else the asset is idle or it depreciates in value.
Just because you are too uncreative to come up with ideas to make money, it doesn't mean other people are like you too, and so they are lying. But to answer your question, I got into investing and business after I found investopedia (which is a great free source of valuable info btw). After that I started saving money and buying books and after a while I had enough knowledge and confidence to turn my savings into assets which in turn produced more money for me. And I was referring to Hungary.
"In December 1982,the CWRIC issued its findings on Executive order 9066 in "Personal Justice Denied", concluding that the incarceration of Japanese Americans had not been justified by military necessity. The report determined that the decision to incarcerate was based on "race prejudice, war hysteria, and a failure of political leadership." On August 10, 1988, the Civil Liberties Act of 1988, based on the CWRIC recommendations, was signed into law by Ronald Reagan."
I meant the late 1970s - early 1980s. Keynesianism was forsaken at that time. Thus we entered the 'dark age of economics' Name one central banker since the 1980s that was 'keynesian'. And btw, the Great Society was just a social program, it wasn't keynesian at all, it wasn't meant to increase demand or mitigate a recession. Inflation was already too high at the time, that's why they brought Volcker in to reduce it
As shown in my other comment, the DEFLATIONARY period between 1870-to 1895 had the greatest economic growth in American History: "The highest decadal rate [of growth of real reproducible, tangible wealth per head from 1805 to 1950] for periods of about ten years was apparently reached in the eighties with approximately 3.8 percent." There is your Milton Friedman quote>
USA industrialized rapidly after the first two decades of the 19th Century. By the 1870's the USA passed Great Britain as the worlds most industrialized nation. That is the period we are talking about.Recent studies by economic historians show conclusively that bank panics have been exaggerated and had caused minimal effect on the growth of the US economy. Those bank panics were caused by excessive expansion of credit. The very thing that Keynesians think solves the problem is the problem.
The US entered WWI in April, 1917; Russia left the war in December of '17. Government regulation in the Progressive era did help certain corporations over others, but its very existence was still a departure from 19th century "pure" capitalism. Wilson and Roosevelt as presidents could only take Progressivism so far, much like Kennedy with civil rights.
Government should not have bailed out anyone NOR given a stimulus check to anyone. Because of that, the economy did not deflate like it normally would during a recession. Instead, the dollar remained neutral while wages still decreased and layoffs happened. Government action made the recession far, far worse than it otherwise would have been.
The bubble was caused by excessive credit expansion as a result of ECB monetary policy. When a bubble collapses, credit backed by nothing causes a bust. Toxic bank debt needed to be liquidated at market prices. That would not have destroyed the Spanish (or our) economy. A sharp economic downturn would have ended by now. Instead, we have a crippled economy.
No, i never said that "the last quarter of the 19th was a inflationary period". That was some other guy replying to me, and he was probably being ironic "Then you claimed that deflation couldn't coexist with economic expansion:" It was a generalization. Obviously it can exist, but it's difficult, because in normal conditions, and namely today, it hurts growth
"We might have done nothing. That would have been utter ruin. Instead we met the situation with proposals to private business and to Congress of the most gigantic program of economic defense and counterattack ever evolved in the history of the Republic. We put it into action…. No government in Washington has hitherto considered that it held so broad a responsibility for leadership in such times….:" Herbert Hoover 1932.
I did not say 'all' small and medium sized banks were healthy, I said the vast majority, and they were. The ones that were not should have been allowed to fail. Their assets, those that were not toxic, would have been bought by solvent institutions. The only things that would have collapsed are those things that 'should' do so, as they are loosing money (businesses) or essentially fraudulent (toxic assets).
What video in Spain? I remember one with a Austrian unknown chap who blabbed on about 'Japan soaring inflation' Spain didn't "adopt Krugman's methods". Spain has been trying to cut its deficit since 2009 or so. Spain had a huge housing bubble, mainly targeted at wealthy northern europeans, and it wasn't caused by any 'monetary expansion'. The euro is like a gold standard, there's no expansion.
The price inflation context was OVER the first 120 years. AGAIN I said the bank panics were overestimated in frequency and effect on the economic growth of the USA. This has now been confirmed in multiple studies. The claims on bank panics frequency were based on the Kemmerer series now found to be erroneous and based on serious flaws. If you are unable to keep up with recent economic studies, this is a waste of time.
There was no inflation in those countries. It was a deflationary period, A structural deflation existed from 1873 until the cycle upswing that started in 1896. Milton Friedman (-1.7%/year, USA .8% in GB) Note also that the economic data over that period is being reworked. The claimed recessions over that time were actually shorter and milder than thought. The bank panics were caused by excessive credit expansion and prosperity and GDP growth were much higher: Thus "the gilded age".
Paul Krugman quotes 2002: "Low interest rates, which promote spending on housing and other durable goods, are the main answer." "To fight this recession the Fed needs…soaring household spending to offset moribund business investment. [So] Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble." "To be honest, a new bubble now would help us out a lot even if we paid for it later. This is a really good time for a bubble" Keynesian s didn't predict they advocated..
"Keynesian economics requires Central Banks" but central banks don't require Keynesianism, Einstein. Central banks existed for more than a century in Europe before any keynesnism All major countries had central banks in the CLASSICAL GOLD ERA (1950-1914)
"People" didn't "allow" the government to "grow past its limited constitutional functions." The corporate special interests grew by deliberate state non-intervention, based on compliant politicians and judges, especially in the latter quarter of the 19th century. It then became necessary for national legislation to oversee interstate corporate trade. Government as regulator *of* businesses, as opposed to a regulator *for* business, is a product of the Progressive era.
but before anyone can invest or buy anything they all must work and they all must earn there necessities to sustain biological energy production to avoid self dissassembling which means agreements verbally or contractually
Read about the great depression and you'll see it was the lower and middle class who got slammed; the unemployment was incredible. The wealthy got richer as a result of the depression; cash was king; it was a great time to accumulate tangible assets like real estate. My parents and grandparents lived through it; the poverty was devastating. I don't want to see it happen again.
In raw numbers. Adjust for inflation. Also capital gains have increased, and taxes are even more deeply cut. "Gov. spending" also covers "corporate welfare" and things like Medicare/Medicaid, which subsidizes the private health industry. That's why gov. spending can increase, capitalist profits go up, and the rest are left swimming in the leftovers.
When the US and global economy collapses, our problems will initially be much worse. Like how to find food to eat, water to drink, and defend ourselves from the criminally desperate. But eventually a better system will rise from the ashes. How long that process takes is the million dollar question...
The issue is if deflation dampened the prosperity. It's likely that it did. In a deflationary period, like that one, nominal-valued debts become unsustainable.
Then why was the economy so much better with higher wages and a much larger middle class when Unions were a plenty. I don't agree with Unions in the public sector, but advocate them in the large private corporations.
The bubble then crashed when the recession hit. House prices have fallen dramatically since, and the whole economy with it. The 'toxic' bank debt that resulted would have destroyed the spanish economy if the govt and foreign lenders hadn't stepped in
How to make money during recession: when the recession is coming, you sell all your stock. And get $b in cash. Then you buy the shares which are now very cheap, and have them grow when recession is over.
I said I reposted all those comments. I just remove them to edit the orthography. and then post them again No need to whine and complain about it dude. You just have to press the 'refresh' button, or use the auto-update option
Much can be said of the period. The business press at least was very negative at times. Business expectations affect the level of investment The issue is not if the period was good compared to previous times, of course it was. But that prosperity came from spurious factors: a tech revolution, peace (after the 1948 revolutions in Europe and the civil war in America), colonialism, increasing globalization etc. As well as a refinement of business and economic knowledge
Karl Denninger has been explaining that it's really not a free market when other countries don't have to play by the same labor and environmental rules, and conform to first-world notions of human rights. If they did, labor would not be nearly as cheap in those other countries...............
So you want a system where banks wouldn't lend to one another? Let's see how such a system would work: 1) you put yours moneys in a small bank. 2) the bank lends out your money 3) Some of the loans default, the bank cannot repay the depositors, and there's a run on the bank 4) Congrats, you've just lost all your money because the bank cannot loan from other banks hurray
My description was unfortunately vague due to the limit of only 500 characters in a RUclips comment. An individual investor loosing would not be bailed out. But if they were invested in an investment bank that was "too big to fail", then they would be bailed out by the bank being bailed out. Tarp for instance was a rescue plan for the super wealthy, paid for by the poor, the middle class and the unborn.
First, it's impossible to achieve stable prices *without* a central bank controlling the money supply. Supply and demand of goods always change, so even with a constant money supply, prices would change. Second, steady growth can be done without inflation, but it will general be slower, simply because there's less incentive to invest in non-capital, non-monetary stuff. When there's inflation, people don't hoard money
Not quite. The first revolution and the overthrow of the Czar was in Feb 1917. The provisional government had announced it's intention to withdraw from the war earlier, and Russian forces had already ceased operations against the Germans several months earlier. Although the OFFICIAL date was later in Dec, 1917, the reality was the Russians were out of the war. See Chris Hedges work on that subject. Progressive became a alliance of special interests: big corporations, big labor and gov't.
Inflation doesn't "kills the poor and middle class." Inflation hurts above all those who live off nominal rents. The rentier class. Such as bond holders and creditors. Which are all mainly well-off. Those who BENEFIT from inflation are the 'poor and middle class': those who live off inflation-adjusted wages, and the unemployed who get jobs b/c of the boosted economy,
"expansionary FISCAL policy" may be done by various reasons. It's keynesian when it's keynesian. There's many reasons to use them other than to meet keynesian goals. Bernanke is a Monetarist, not a keynesian
"Creating new jobs and giving to the whole system a new breath of life; nothing has ever been devised in our history which has done more for men and women. Some of the reactionary economists urged that we should allow the liquidation to take its course until we had found bottom…. We determined that we would not follow the advice of the bitter-end liquidationists and see the whole body of debtors of the United States brought to bankruptcy and the savings of our people brought to destruction"
I didn't "confuse" T Roosevelt with FDR. I assumed anyone with knowledge of history would understand my reference. Fact is that regulation WAS set up by progressives for Corporate interests. The largest misuse of the Commence Clause was FDR when WW 2 started many young failed the physical due to malnutrition due to FDR's Ag policies to create food shortages and increase prices. Your Arnold reference is just weird given his career.
When did I say I'm unemployeed, what does any of this have to do with employement? Again, somebody else missed the point articulated by the good man Malekanoms and lashed out on the internet community in their moments of confusion.
I don't have any problem with it. I'm just saying that you are using a particular definition of the term "central planning" - your own made up definition. And that muddles the discussion. Please use the standard terms
Spain adopted Keynesian Fiscal policy long before 2009. For decades. And monetary policy: "The single European monetary policy was too loose for the rapidly growing GIIPS" from THE EURO IN CRISIS - Carnegie Endowment No ,monetary expansion???? EU M3 rose dramatically from 2001. It had tripled by the end of 2008. Source: ECB Stastical Data Warehouse.
Wrong. The entire period was an attempt to stimulate after the crash in 2000. And no, the fiscal stimulus didn't end in 2010. Government spending (state, local and federal ) is 41% of GDP Higher if you subtract the deficit spending of 7% and re-figure ir honestly (41%/100%-7% or 44%. In FY 2000 total government spending was 33%. So government spending is up by 24% or 33% depending on how you figure it. The stimulus is ongoing.
The growing wealth gap is caused by the Federal Reserve and it's low interest, inflationary policy. Inflation is 'deliberately' manufactured so prices will rise by ~3% instead of fall by ~5% which they would in a true free market. That 8% annual reduction in purchasing power kills the poor and middle class. Meanwhile the wealthy can avail themselves of artificially low interest rates (literally negative) to leverage their investments, & if they fail, their losses are covered by government.
I admire him too. Plus he is a great philanthropist. I would like to see some of these ugly naysayers help people with donations and philanthropy. Their disgusting attitudes do not get them anywhere. He is a wise man not because he is rich but he has a great life philosophy too.
"The logical chain beginning with Keynes' fundamental idea that government, supported by a central bank, should play a large and active role in the economy sets the stage for a centrally planned economy and ultimately produces a corporate state."
Only Keynesian sources are "unbiased"?.....BTW I used those references since that seems to be at your level. But go ahead and read: >Friedman, Schwartz. A Monetary History of the United States: 1867-1960. >A.E. Musson. "The Great Depression in Britain, 1873-1896: a Reappraisal", The Journal of Economic History (1959), 19: 199-228 > George Selgin. "Less Than Zero - The Case for a Falling Price Level in a Growing Economy", The Institute of Economic Affairs, 1997, p.49-53. Especially the last
The point of the video is that in the current system the rich get richer via government bailouts ie government spending. Not the creation of new capital.
That article is written by a gold bug lol. Anyway, you could say he's a keynesian now, because of the recent crisis. It's perfectly natural for a RATIONAL individual to be keynesian now, simply because the Monetarist recipe for reviving the economy isn't working that well. But Bernanke's still mainly monetarist, and he's known for that. His academic works, especially on the G.B., had mostly a monetarist view if i'm not mistaken Of course the real world tends to be different than academia :)
No., The study cited both major and minor. Using the "minor" criteria, the results showed there were even more bank crisis after 1913. Add in the Great Depression, Stagflation of the 1970's til '82 and now. and the results are dismal. for the Fed. You didn't read the cited study and are not keeping up with current work. .
You talked of "zero price inflation for the first 120 years", which didn't happen. Bank panics existed and were very common. And the 'excessive credit' was also very real - the easy credit was exactly one of the reasons for the rapid growth of America. If you are saying that "excessive credit" was a problem, you really have it backwards lol. Without that same excessive credit the US economy would have grown much slower.
The banks don't "receive the new money early". The banks create the money. They are the money. If banks didn't lend you 'money', you wouldn't have any. And without inflation, they wouldn't lend you money. It's the central bank/govt itself that "gets money early", and then passes it on by lending to other banks, spending it, buying bonds etc. Money is just that - credit Anyway, with a typical stable, predictable inflation, most wages and benefits are adjusted accordingly.
This began as a good video (investing now can yield terrific results decades from now), but it derailed. The bank bailouts were designed to keep more banks from failing. More bank failures means more mortgages going under, and less liquidity for businesses and individuals. This would contract the money supply further and that would affect everyone, rich and poor. Its true some people profited heavily from the bailouts, but most banks and AIG paid back the money they borrowed.
No, but Rothbard!? lol. People who say thinks that "F.R.B is evil"? Austrians have been predicting collapses since the 19th century ;) They say always the same thing. Post-Keynesians also predicted the collapse in 2002 Krugman never advocated for a housing bubble. He was commenting on the situation, and saying the Greenspan couldn't offset the Nasdaq bubble he created with monetary policy *alone*, as he was trying to do
Yeah, a guy who says Fractional reserve banking is "evil and immoral" is certainly a unbiased very serious scholar :) Lots of economic studies that he did to arrive at that conclusion i'm sure
Who argued that inflation or deflation was SOLELY based on money supply? I've already shown your belief that (price) deflation is historically false. The '29 crash was caused by mal investments in the boom period caused by earlier credit/money expansion. GD was caused by interventions that prevented liquidation of those mal investments and wage and price fixing. CONTRACTION of money supply and slowing velocity of money was the SYMPTOM, not the cause; a RESULT of credit backed by nothing.
I agree that the government shouldnt have bailed out anyone- if you take a risk, the government doesnt get all your winning and yet they paid for the loss. That is socialism not capatilism, yet capatilism will be blamed for what socialism brings.
I would be happy to invest in a period of zero monetary inflation as was the case over the vast majority of the history of the USA. Knowing what materials and labor would cost stabilizes risk in production. Profit is profit, and a return on investment knowing that that return is worth the same, or in the case of lowering prices even more is attractive. The difference is that speculation and leverage are NOT rewarded and are more risky. Results are steady growth instead of booms and busts.
You were originally talking about Teddy Roosevelt. The incarceration of Japanese resident nationals and Japanese-American citizens under FDR is already well known.
WOW!!!! Now we are here in 2020 so interesting. What happens after you Q E and all the horses and all the king's men could not put society back together again. Why because of the greed of man. Again, when are people going to learn.
Yeah, no. Rich people having too much money isn't what caused the Great Depression.
The creation of the Federal Reserve Bank, in 1913, caused the Great Depression.
The banks were no longer bound by deposits. They could borrow money from the Federal Reserve. They allowed people to borrow money in the 1920s, and do whatever they wanted with it. The money was still backed by gold, but only on paper. Many people who borrowed this money, invested it in the stock market. This drove the market up to incredible heights. Then, in 1929, (and this has nothing to do with the stock market crash), a run on gold started, because many astute traders could see the increase in the money supply. So, in 1929, the discount rate was raised to 12%, which effectively cut-off money from the markets, and brought down the stock market, but the run on gold still continued.
Raising the rate effectively started reigning-in the excess money. A contraction of the money supply is one of the most damaging things to a free market economy because labor contracts, and mortgages, and all sorts of other contracts, are based on a consistent money supply. When the money supply falls, then every other expense MUST fall, to maintain stability in the economy, but this can't be done because of contracts, as mentioned above. Not only that, but both wages and prices must fall, and this is very difficult.
So the money supply was reigned in. Then in 1933, after Roosevelt became president, in March, gold was at such a shortage that the federal government was about to go bankrupt, because, at the time, gold was the only legitimate money in the US. At this time, the money supply had already shrunk by over 30%. Roosevelt felt he had no choice but to ban the ownership of gold. This would require every private citizen in the US to return their gold to the treasury. When all was said and done, even though the money supply had shrunk by over 30%, gold was then devalued another 40%, which demonstrated in real terms, how much additional money had been pumped into the economy.
The Federal Reserve was created to stop bank runs, and ease credit during the brief recessions of the 1800s, which rarely lasted more than a year. Instead, it created catastrophic recessions which lasted over a decade in the 1930s, and the 1970, and arguably since 2008, today.
Actually, the creation of the Fed wasn't the ultimate CAUSE of the great depression, or any depression, rather it was and is a TOOL used to enrich a select few at the expense of all others. Basically depressions are but one part of the Fed induced "economic cycle." First, The Fed lowers interest rates to member banks, who in turn lower their consumer loan rates and relax lending standards. Businesses and people, that are otherwise unqualified, borrow money for projects that would be unprofitable or items that would be unaffordable without the easy money. As a result, businesses and people are in deep debt. Next, The Fed increases the interest rates to member banks, who in turn increase their consumer loan rates and tighten lending standards (because since they must pay higher rates, they need to be sure to lend to better credit risks). As a result, once profitable projects become unprofitable at the new higher interest rates, thus businesses decline to borrow and expand operations, or some, once dependent on the easy money, scale back operations, leading to layoffs. Some people, once qualified to borrow under easy money policy, are no longer qualified, so they can't borrow. Others that did borrow, now laid off from work, can't keep up loan payments leading to repossessions, dispossessions, evictions, and foreclosures. Because money for the vast majority of people and businesses is tight, demand goes down, while desire and need to sell off items, from manufactured goods and food to stock and real estate, vastly increases, leading to lower selling prices. In comes the rich: since prices have gone down, especially so for financial instruments and real estate, they snap up the remaining supply for pennies on the dollar. THAT is how the rich remain rich or get richer while the average Joe gets poorer during a depression. Further, those that control the Fed plan and execute booms and busts and the main reason why they "appear" to be randomized is because the Fed refuses to share its money policy plans with the masses in advance of their execution.
WHOA!
Now cool it with the antisemitic remarks
Gold was never devalued. In fact during roosevelt the price was raised to 35 from 20
@@EnergeticWaves yes i was about to say that, the devaluation was temporary and discouraged ppl from buying gold and encouraged to sell. Once the ownership of gold was low, if became "rare" and its price boomed ever since.
@@macplatt6183 exactly. In summary: The rich buy the dip in the economy crises, and sell at tops. Also now they encourage pandemics for v4xine profits from directly selling to the governments (pfizer, j&j, moderna, etc).
Its the best investment strategy and the worst scam in history lmfao.
Example: Person A invests his salary in a banks stock, forgoing instant gratification, and person B takes out a credit card with that same bank just because they wanted to buy stuff now, over time person B gives their hard earned money to person A in the form of interest; one pays interest to the bank, one earns interest from the bank (think of two half filled glasses of water with one pouring into the other). This goes for mortgages, car loans, student loans etc and it happens faster as time passes.
Moral, get out and stay out of debt as quickly as possible, stop giving these people your money if you think they are so evil, stop buying things that you don't need with money that you don't have. The rich get richer in a recession because they educated themselves, worked hard, saved money, built their wealth and were then able to buy shares in companies that were now being sold at a discounted price, once the companies recover from the recession the rich make bumper profits, simple. Far from all were born into riches.
Read books like 'The millionaire next door', 'Rich dad, poor dad', 'Total Money Makeover', 'Retire inspired' etc... Point is, educate yourself and stop being a victim, and rather than vilify these people, learn from them.
Lee Maitland ✍this words made me feel good. Suddenly with a Vision.
As you've said, that era is ill understood, and there's a lack of data on the subject. How do they even calculated total economic output at that time?
But it's a well known that there was a real recession/depression in the 1870s, and it was not only american. It started in Austria I believed and affected many western countries.
I have recently discovered your Xtranormal vids, and frankly find you a very interesting voice in giving folks a clear and concise (albeit, from your perspective - but one I hope a lot of folks give an ear to) introduction to the subjects you choose.
I was just busy introducing a few choice folks to your vids on Quantitative Easing, and noticed you just published this new vid.
I love what you are doing here. You are making me think in new ways about these subjects.
the extremely rich got richer, while the rest got ripped off. its not just a disparity. I just love how people use that word disparity
The issue to the whole problem isn't the fact that people such as warren buffet or other super wealthy people don't get taxed the issue is that we aren't taxing them in the right area. The biggest tax that you will ever pay is EARNED INCOME look up Robert Kiyosaki he explains this. If you put money in savings and get interest or punch a clock at work you make earned income and uncle Sam can take as much as 50% of your salary. Rich people don't get taxed because their money comes from INVESTMENTS. Their real estate homes, apartments, stocks, bonds, options, futures. And they protect all of these assets by putting them into a trust which is tax-free. Wealthy are intelligent when it comes to money their not stupid. Because they know the laws and loopholes they will keep their billions and use tax write offs by lowering their income to being as much as a poor person.
Justin...you nailed it.
I only blame big government. I never made more than 30,000K until a couple of years ago. Yet, I got a quarter million saved. I avoid debt like the plague. The only ones fighting for what I want is the Tea Party. More power to them. They're the only ones trying to shrink the size of government.
More taxes and regulation=less freedom.
Current studies: "Prior to 1914, recurring periods of 14 to 20 years without a major banking panic were the norm."
For those reading this exchange, Majlerin is touting the Keynesian line. This economic theory is the same one that caused the problem, the one that is perpetuating it. Keynesians told everyone that everything was just fine right up to the collapse, then said that no one could have predicted it. My point of view is the Austrian theory, which did in fact predict the crisis and explains why we are still in the dumps, 'because' of what the Keynesians are doing.
More...
The quotes are from Herbert Hoover's acceptance speech for renomination for the Republican nomination in August 17th 1932. As FDR's Treasury Secretary stated, FDR continued and expanded Hoover's interventionist policies. FDR's policies were, in fact, devised by the Hoover administration.
If you've read the famous work of Friedman, his argument is that the contraction of the money supply was indeed the CAUSE for the depression. Not the crash, but the ensuing long depression
And no, the contraction wasn't caused by "interventions that prevented liquidation", it was caused by the systemic bank failures and the recessive spiral.
Friedman's point is precisely this: that the Fed needed to intervene to save the banks and provide credit. But it DIDN'T
WE ALL DIE IN THE END,MONEY OR NO MONEY
But I had a better life than you 😏
+Diogo De Campos And then it's over with,we all become the same
+truth How would know what is after life?
+Diogo De Campos this ^
The problem is that the life get pretty miserable when you have no money.
Still more frequent than today ;) And that's "MAJOR banking panics". Minor banking panics, bank runs, were much more common than today.
And from that same article:
"panics were a substantial source of economic instability prior to the founding of the Federal Reserve"
At the end of the game the kings and the pawns end up in the same box.
Essentially, Friedman believed that that the Fed/government should have prevented bank failures by supporting them with loans, monetize debt by expanding the money supply; prevent firms from failing by bailouts, and keep wages high by liquidity injections by the Fed into the economy. Japan did all of this post 1990. The USA is doing the same. It doesn't work. Treating symptoms is not a cure.
FYI Google: " FDR's policies prolonged Depression by 7 years, UCLA economists calculate" But it was actually Hoovers interventionist policies that got it started. FDR made it worse.
2021 checking in.
"From 1869 to 1879, the US economy grew at a rate of 6.8% for real GDP and 4.5% for real GDP per capita, despite the panic of 1873. The economy repeated this period of growth in the 1880s, in which the wealth of the nation grew at an annual rate of 3.8%, while the GDP was also doubled." :"The highest decadal rate [of growth of real reproducible, tangible wealth per head from 1805 to 1950] for periods of about ten years was apparently reached in the eighties with approximately 3.8 percent."
I love the Warren 'Buffeeey' character! Waaay too cool! Keep 'em comin'!
"Perhaps the greatest modern champion of central economic planning was the 20th century English economist John Maynard Keynes. Keynes, who was a political socialist and for a time a central banker, advocated the idea that the government should play a large, active role in the economy. Among the consequences of Keynes' economic theories, whether intended or unintended, is the fact that Western economies today are characterized by large, central governments, central banks and massive debts."
Truth! Having said that, it doesn't make a fuck bit of difference because many of the plebs will still hate you regardless of what kind of rich you are.
For example a office building that was built specifically for mortgage brokers would have sold for a premium during the housing boom. When there is reduced demand for mortgages due to a burst bubble, the building could be converted to say a physical fitness firm. But not at a premium price. It must be liquidated to make financial sense. If the gov't props up the market costs of maintaining it resources are wasted else the asset is idle or it depreciates in value.
Just because you are too uncreative to come up with ideas to make money, it doesn't mean other people are like you too, and so they are lying. But to answer your question, I got into investing and business after I found investopedia (which is a great free source of valuable info btw). After that I started saving money and buying books and after a while I had enough knowledge and confidence to turn my savings into assets which in turn produced more money for me. And I was referring to Hungary.
"In December 1982,the CWRIC issued its findings on Executive order 9066 in "Personal Justice Denied", concluding that the incarceration of Japanese Americans had not been justified by military necessity. The report determined that the decision to incarcerate was based on "race prejudice, war hysteria, and a failure of political leadership." On August 10, 1988, the Civil Liberties Act of 1988, based on the CWRIC recommendations, was signed into law by Ronald Reagan."
I meant the late 1970s - early 1980s. Keynesianism was forsaken at that time. Thus we entered the 'dark age of economics'
Name one central banker since the 1980s that was 'keynesian'.
And btw, the Great Society was just a social program, it wasn't keynesian at all, it wasn't meant to increase demand or mitigate a recession. Inflation was already too high at the time, that's why they brought Volcker in to reduce it
As shown in my other comment, the DEFLATIONARY period between 1870-to 1895 had the greatest economic growth in American History: "The highest decadal rate [of growth of real reproducible, tangible wealth per head from 1805 to 1950] for periods of about ten years was apparently reached in the eighties with approximately 3.8 percent." There is your Milton Friedman quote>
The sad part of this video isn't the truth in it. It's the views. There should be at least 300 million+ views... every American needs to see this.
TRANSITORY
Its more complicated then just blaming Buffett
Than*
Superformance72 Myopia
The income gap is based on which subjective model you use to determine that.
USA industrialized rapidly after the first two decades of the 19th Century. By the 1870's the USA passed Great Britain as the worlds most industrialized nation. That is the period we are talking about.Recent studies by economic historians show conclusively that bank panics have been exaggerated and had caused minimal effect on the growth of the US economy. Those bank panics were caused by excessive expansion of credit. The very thing that Keynesians think solves the problem is the problem.
The US entered WWI in April, 1917; Russia left the war in December of '17. Government regulation in the Progressive era did help certain corporations over others, but its very existence was still a departure from 19th century "pure" capitalism. Wilson and Roosevelt as presidents could only take Progressivism so far, much like Kennedy with civil rights.
Government should not have bailed out anyone NOR given a stimulus check to anyone. Because of that, the economy did not deflate like it normally would during a recession. Instead, the dollar remained neutral while wages still decreased and layoffs happened. Government action made the recession far, far worse than it otherwise would have been.
The bubble was caused by excessive credit expansion as a result of ECB monetary policy. When a bubble collapses, credit backed by nothing causes a bust. Toxic bank debt needed to be liquidated at market prices. That would not have destroyed the Spanish (or our) economy. A sharp economic downturn would have ended by now. Instead, we have a crippled economy.
The Treasury and the Fed are obsessed with Wall Street/stock prices above all else. The stench of rot and corruption in the plutacracy is terrible...
Bernanke is a Keynesian. Google: "Bernanke Channels Nixon, Revives "We're All Keynesians Now ..." Or many articles under "Bernanke is is Keynesian."
No, i never said that "the last quarter of the 19th was a inflationary period".
That was some other guy replying to me, and he was probably being ironic
"Then you claimed that deflation couldn't coexist with economic expansion:"
It was a generalization. Obviously it can exist, but it's difficult, because in normal conditions, and namely today, it hurts growth
"We might have done nothing. That would have been utter ruin. Instead we met the situation with proposals to private business and to Congress of the most gigantic program of economic defense and counterattack ever evolved in the history of the Republic. We put it into action…. No government in Washington has hitherto considered that it held so broad a responsibility for leadership in such times….:"
Herbert Hoover 1932.
I did not say 'all' small and medium sized banks were healthy, I said the vast majority, and they were. The ones that were not should have been allowed to fail. Their assets, those that were not toxic, would have been bought by solvent institutions. The only things that would have collapsed are those things that 'should' do so, as they are loosing money (businesses) or essentially fraudulent (toxic assets).
What video in Spain? I remember one with a Austrian unknown chap who blabbed on about 'Japan soaring inflation'
Spain didn't "adopt Krugman's methods". Spain has been trying to cut its deficit since 2009 or so.
Spain had a huge housing bubble, mainly targeted at wealthy northern europeans, and it wasn't caused by any 'monetary expansion'. The euro is like a gold standard, there's no expansion.
The price inflation context was OVER the first 120 years. AGAIN I said the bank panics were overestimated in frequency and effect on the economic growth of the USA. This has now been confirmed in multiple studies. The claims on bank panics frequency were based on the Kemmerer series now found to be erroneous and based on serious flaws. If you are unable to keep up with recent economic studies, this is a waste of time.
There was no inflation in those countries. It was a deflationary period, A structural deflation existed from 1873 until the cycle upswing that started in 1896. Milton Friedman (-1.7%/year, USA .8% in GB) Note also that the economic data over that period is being reworked. The claimed recessions over that time were actually shorter and milder than thought. The bank panics were caused by excessive credit expansion and prosperity and GDP growth were much higher: Thus "the gilded age".
Paul Krugman quotes 2002: "Low interest rates, which promote spending on housing and other durable goods, are the main answer."
"To fight this recession the Fed needs…soaring household spending to offset moribund business investment. [So] Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."
"To be honest, a new bubble now would help us out a lot even if we paid for it later. This is a really good time for a bubble"
Keynesian s didn't predict they advocated..
"Keynesian economics requires Central Banks"
but central banks don't require Keynesianism, Einstein. Central banks existed for more than a century in Europe before any keynesnism
All major countries had central banks in the CLASSICAL GOLD ERA (1950-1914)
"People" didn't "allow" the government to "grow past its limited constitutional functions." The corporate special interests grew by deliberate state non-intervention, based on compliant politicians and judges, especially in the latter quarter of the 19th century. It then became necessary for national legislation to oversee interstate corporate trade. Government as regulator *of* businesses, as opposed to a regulator *for* business, is a product of the Progressive era.
but before anyone can invest or buy anything they all must work and they all must earn there necessities to sustain biological energy production to avoid self dissassembling which means agreements verbally or contractually
I spread your videos like wild fire!!!! Keep making them as they are great tools to inform the masses.
Read about the great depression and you'll see it was the lower and middle class who got slammed; the unemployment was incredible. The wealthy got richer as a result of the depression; cash was king; it was a great time to accumulate tangible assets like real estate. My parents and grandparents lived through it; the poverty was devastating. I don't want to see it happen again.
In raw numbers. Adjust for inflation. Also capital gains have increased, and taxes are even more deeply cut. "Gov. spending" also covers "corporate welfare" and things like Medicare/Medicaid, which subsidizes the private health industry. That's why gov. spending can increase, capitalist profits go up, and the rest are left swimming in the leftovers.
When the US and global economy collapses, our problems will initially be much worse. Like how to find food to eat, water to drink, and defend ourselves from the criminally desperate. But eventually a better system will rise from the ashes. How long that process takes is the million dollar question...
The issue is if deflation dampened the prosperity. It's likely that it did.
In a deflationary period, like that one, nominal-valued debts become unsustainable.
It's the unions that push up cost of living
Then why was the economy so much better with higher wages and a much larger middle class when Unions were a plenty. I don't agree with Unions in the public sector, but advocate them in the large private corporations.
The bubble then crashed when the recession hit. House prices have fallen dramatically since, and the whole economy with it. The 'toxic' bank debt that resulted would have destroyed the spanish economy if the govt and foreign lenders hadn't stepped in
How to make money during recession:
when the recession is coming, you sell all your stock. And get $b in cash. Then you buy the shares which are now very cheap, and have them grow when recession is over.
Paying cash for everything can help you to save money. When using your car consolidate your trips. Don't eat out. Prepare your meals at home.
How would one save for a big purchase? Is this distinguishable from people 'sitting on their money'?
I said I reposted all those comments. I just remove them to edit the orthography. and then post them again
No need to whine and complain about it dude. You just have to press the 'refresh' button, or use the auto-update option
Much can be said of the period. The business press at least was very negative at times. Business expectations affect the level of investment
The issue is not if the period was good compared to previous times, of course it was. But that prosperity came from spurious factors: a tech revolution, peace (after the 1948 revolutions in Europe and the civil war in America), colonialism, increasing globalization etc. As well as a refinement of business and economic knowledge
Karl Denninger has been explaining that it's really not a free market when other countries don't have to play by the same labor and environmental rules, and conform to first-world notions of human rights. If they did, labor would not be nearly as cheap in those other countries...............
So you want a system where banks wouldn't lend to one another? Let's see how such a system would work:
1) you put yours moneys in a small bank.
2) the bank lends out your money
3) Some of the loans default, the bank cannot repay the depositors, and there's a run on the bank
4) Congrats, you've just lost all your money because the bank cannot loan from other banks
hurray
My description was unfortunately vague due to the limit of only 500 characters in a RUclips comment. An individual investor loosing would not be bailed out. But if they were invested in an investment bank that was "too big to fail", then they would be bailed out by the bank being bailed out. Tarp for instance was a rescue plan for the super wealthy, paid for by the poor, the middle class and the unborn.
First, it's impossible to achieve stable prices *without* a central bank controlling the money supply. Supply and demand of goods always change, so even with a constant money supply, prices would change.
Second, steady growth can be done without inflation, but it will general be slower, simply because there's less incentive to invest in non-capital, non-monetary stuff. When there's inflation, people don't hoard money
Not quite. The first revolution and the overthrow of the Czar was in Feb 1917. The provisional government had announced it's intention to withdraw from the war earlier, and Russian forces had already ceased operations against the Germans several months earlier. Although the OFFICIAL date was later in Dec, 1917, the reality was the Russians were out of the war. See Chris Hedges work on that subject. Progressive became a alliance of special interests: big corporations, big labor and gov't.
Inflation doesn't "kills the poor and middle class."
Inflation hurts above all those who live off nominal rents. The rentier class. Such as bond holders and creditors.
Which are all mainly well-off.
Those who BENEFIT from inflation are the 'poor and middle class': those who live off inflation-adjusted wages, and the unemployed who get jobs b/c of the boosted economy,
"expansionary FISCAL policy" may be done by various reasons.
It's keynesian when it's keynesian. There's many reasons to use them other than to meet keynesian goals.
Bernanke is a Monetarist, not a keynesian
"Creating new jobs and giving to the whole system a new breath of life; nothing has ever been devised in our history which has done more for men and women. Some of the reactionary economists urged that we should allow the liquidation to take its course until we had found bottom…. We determined that we would not follow the advice of the bitter-end liquidationists and see the whole body of debtors of the United States brought to bankruptcy and the savings of our people brought to destruction"
I didn't "confuse" T Roosevelt with FDR. I assumed anyone with knowledge of history would understand my reference. Fact is that regulation WAS set up by progressives for Corporate interests. The largest misuse of the Commence Clause was FDR when WW 2 started many young failed the physical due to malnutrition due to FDR's Ag policies to create food shortages and increase prices. Your Arnold reference is just weird given his career.
When did I say I'm unemployeed, what does any of this have to do with employement? Again, somebody else missed the point articulated by the good man Malekanoms and lashed out on the internet community in their moments of confusion.
Could you explain how their losses are covered by government? I'm not against your points, i just want to understand better.
Once again, a brilliant video from Omid.
The last Krugman quote I listed earlier was from Krugman in Spain in 2002. There is a Video in Spanish on that.
I don't have any problem with it. I'm just saying that you are using a particular definition of the term "central planning" - your own made up definition.
And that muddles the discussion. Please use the standard terms
Spain adopted Keynesian Fiscal policy long before 2009. For decades. And monetary policy: "The single European monetary policy was too loose for the rapidly growing GIIPS" from THE EURO IN CRISIS - Carnegie Endowment
No ,monetary expansion???? EU M3 rose dramatically from 2001. It had tripled by the end of 2008. Source: ECB Stastical Data Warehouse.
Wrong. The entire period was an attempt to stimulate after the crash in 2000. And no, the fiscal stimulus didn't end in 2010. Government spending (state, local and federal ) is 41% of GDP Higher if you subtract the deficit spending of 7% and re-figure ir honestly (41%/100%-7% or 44%. In FY 2000 total government spending was 33%. So government spending is up by 24% or 33% depending on how you figure it. The stimulus is ongoing.
The growing wealth gap is caused by the Federal Reserve and it's low interest, inflationary policy. Inflation is 'deliberately' manufactured so prices will rise by ~3% instead of fall by ~5% which they would in a true free market. That 8% annual reduction in purchasing power kills the poor and middle class. Meanwhile the wealthy can avail themselves of artificially low interest rates (literally negative) to leverage their investments, & if they fail, their losses are covered by government.
I admire him too. Plus he is a great philanthropist. I would like to see some of these ugly naysayers help people with donations and philanthropy. Their disgusting attitudes do not get them anywhere. He is a wise man not because he is rich but he has a great life philosophy too.
2021 anyone?
"The logical chain beginning with Keynes' fundamental idea that government, supported by a central bank, should play a large and active role in the economy sets the stage for a centrally planned economy and ultimately produces a corporate state."
Only Keynesian sources are "unbiased"?.....BTW I used those references since that seems to be at your level. But go ahead and read:
>Friedman, Schwartz. A Monetary History of the United States: 1867-1960.
>A.E. Musson. "The Great Depression in Britain, 1873-1896: a Reappraisal", The Journal of Economic History (1959), 19: 199-228
> George Selgin. "Less Than Zero - The Case for a Falling Price Level in a Growing Economy", The Institute of Economic Affairs, 1997, p.49-53.
Especially the last
The point of the video is that in the current system the rich get richer via government bailouts ie government spending. Not the creation of new capital.
Why do the voices silence letters in Buffet's name and Bernanke's name?
How's that praxeology working out for you mate? Lots of hyper-inflation up there in Austrischelund?
That article is written by a gold bug lol.
Anyway, you could say he's a keynesian now, because of the recent crisis.
It's perfectly natural for a RATIONAL individual to be keynesian now, simply because the Monetarist recipe for reviving the economy isn't working that well.
But Bernanke's still mainly monetarist, and he's known for that. His academic works, especially on the G.B., had mostly a monetarist view if i'm not mistaken
Of course the real world tends to be different than academia :)
No., The study cited both major and minor. Using the "minor" criteria, the results showed there were even more bank crisis after 1913. Add in the Great Depression, Stagflation of the 1970's til '82 and now. and the results are dismal. for the Fed.
You didn't read the cited study and are not keeping up with current work. .
very good video
You talked of "zero price inflation for the first 120 years", which didn't happen.
Bank panics existed and were very common. And the 'excessive credit' was also very real - the easy credit was exactly one of the reasons for the rapid growth of America.
If you are saying that "excessive credit" was a problem, you really have it backwards lol. Without that same excessive credit the US economy would have grown much slower.
The banks don't "receive the new money early". The banks create the money. They are the money. If banks didn't lend you 'money', you wouldn't have any. And without inflation, they wouldn't lend you money.
It's the central bank/govt itself that "gets money early", and then passes it on by lending to other banks, spending it, buying bonds etc. Money is just that - credit
Anyway, with a typical stable, predictable inflation, most wages and benefits are adjusted accordingly.
This began as a good video (investing now can yield terrific results decades from now), but it derailed. The bank bailouts were designed to keep more banks from failing. More bank failures means more mortgages going under, and less liquidity for businesses and individuals. This would contract the money supply further and that would affect everyone, rich and poor. Its true some people profited heavily from the bailouts, but most banks and AIG paid back the money they borrowed.
No, but Rothbard!? lol. People who say thinks that "F.R.B is evil"?
Austrians have been predicting collapses since the 19th century ;) They say always the same thing. Post-Keynesians also predicted the collapse in 2002
Krugman never advocated for a housing bubble. He was commenting on the situation, and saying the Greenspan couldn't offset the Nasdaq bubble he created with monetary policy *alone*, as he was trying to do
Yeah, a guy who says Fractional reserve banking is "evil and immoral" is certainly a unbiased very serious scholar :)
Lots of economic studies that he did to arrive at that conclusion i'm sure
Malekan, I thank you from the bottom of my heart. A perfect explanation for the layman!
What interventionist policies? The Smooth-Hawley act?
Well yes, but that has nothing to do with keynesianism or monetary policy
More on 'The Bernank'. I also like it when you compare economists to idiots.
Who argued that inflation or deflation was SOLELY based on money supply? I've already shown your belief that (price) deflation is historically false. The '29 crash was caused by mal investments in the boom period caused by earlier credit/money expansion. GD was caused by interventions that prevented liquidation of those mal investments and wage and price fixing. CONTRACTION of money supply and slowing velocity of money was the SYMPTOM, not the cause; a RESULT of credit backed by nothing.
Very clever. I like the new features.
I agree that the government shouldnt have bailed out anyone- if you take a risk, the government doesnt get all your winning and yet they paid for the loss. That is socialism not capatilism, yet capatilism will be blamed for what socialism brings.
I would be happy to invest in a period of zero monetary inflation as was the case over the vast majority of the history of the USA. Knowing what materials and labor would cost stabilizes risk in production. Profit is profit, and a return on investment knowing that that return is worth the same, or in the case of lowering prices even more is attractive. The difference is that speculation and leverage are NOT rewarded and are more risky. Results are steady growth instead of booms and busts.
You were originally talking about Teddy Roosevelt. The incarceration of Japanese resident nationals and Japanese-American citizens under FDR is already well known.
WOW!!!! Now we are here in 2020 so interesting. What happens after you Q E and all the horses and all the king's men could not put society back together again. Why because of the greed of man. Again, when are people going to learn.
Great job Omid. Please keep up the good work and the Bernank on his toes, at least teporarily!!!!