Sunday, November 23, 2008

jbr HOW DOES CURENT SITUATION COMPARE TO GREAT DEPRESSION Macro History Great Depression, a background

In his first one hundred days in office, Roosevelt was responding to crises more than he was laying plans for economic construction. First he ended the run on the banks, bringing a return of confidence in banking. In a "fireside chat" he told citizens that it was safer to put money in the bank than to keep it under one's mattress. He invoked the Trading with the Enemy Act of 1917 in order to suspend the export of gold and silver. By law, banks and individuals were now required to deliver their gold to Federal Reserve banks in return for currency. Then his advisors talked him into attempting to stimulate the economy by increasing the money supply. This included putting three billion more dollars into circulation and taking the dollar off the gold standard.

During these first one hundred days, Roosevelt decided to help the distressed farmers. Hoover had tried to help farmers by buying their surpluses, which had encouraged over-production and resulted in ruinous low prices for farmers. Instead of this and letting bankruptcies run their course, Roosevelt chose to limit the production of certain crops and to give relief to farmers who were in immediate danger of losing their homes.

One problem with above article is, the damage done from current situation is not over. I agree our morass may take 2nd place in stats of human tradegy, but in historical market stats we are setting some records.


Our small businesses and incubator venture capital layer of new biz has all but been snuffed out, access to credit is needed to fuel the businesses of the future and create new jobs. Where have all the IPO's gone?


1 comment:

Anonymous said...

d -

Thanks for the link to the Great Depression.