Loading ...Regarding the Great Depression… we did it. We’re very sorry… We won’t do it again.
– Ben Bernanke
Waiting too long to begin moving toward the neutral rate could risk a nasty surprise down the road—either too much inflation, financial instability, or both.
– Janet Yellen
In his speech above, future Federal Reserve Chairman Ben Bernanke acknowledged that, by raising interest rates, the Fed triggered the stock market crash of 1929, which heralded in the Great Depression.
Yet, in her speech above, Fed Chair Janet Yellen announced that “it makes sense” for the Fed to raise interest rates “a few times a year.” This is a concern, as economic conditions are similar to those in 1929, and a rise in interest rates may have the same effect as it did then.
So let’s back up a bit and have a look at what happened in 1929. In the run-up to the 1929 crash, the Federal Reserve raised rates to 6%, ostensibly to “limit speculation in securities markets.” As history shows, this sent economic activity south rather quickly. Countless investors, large and small, who had bought stocks on margin, would be unable to pay increased interest rates and would be forced to default. (It’s important to understand that the actual default was not necessary to crash markets. The knowledge that investors would be in trouble was sufficient to send the markets into a tailspin.)
WHY will the Fed do it again?
1.Because the Wiemar republic proved that Inflation is a Danger to Democracy and brought a Dictator ,Hitler to Power .
2. The American depression proved that Democracy was in NO Danger even with an economic collapse .!
Both Democrats and Republicans will opt for Depression because they stay in Power !
Trump, ???????? hehe theres always a WILD Card isnt there !