<blockquote>'..If we want to understand today, we need to know and remember what happened yesterday.'
-
2014 will mark 100 years since the outbreak of the First World War</blockquote>
<blockquote>'..the original goal of the Great Experiment that was the founding of the Fed was the preservation of financial stability..'
- Bernanke,
A Century of U.S. Central Banking: Goals, Frameworks, Accountability, July 10, 2013</blockquote>
<blockquote>‘Why did Strong ['first head of the Federal Reserve Bank of New York (1914-1928)'] pursue a policy that now can seem only heedless, dangerous, and recklessly extravagant?’
- Rothbard (
Affectivity, Action, Electricity)</blockquote>
'I believe the Bernanke Fed is now repeating errors similar to those committed by the Benjamin Strong Federal Reserve during the late-twenties period .. Throughout the Roaring Twenties, U.S.-based Credit became an increasingly dominant source of finance internationally..
The Great Credit Inflation/Bubble that set the stage for the Great Depression generally commenced with the outbreak of World War I.'<blockquote>'I take strong exception with what has over decades become a distorted revisionist view of the 1920s and 1930s periods. For starters, I’ll take issue with the general context of how Bernanke explains the objectives of the new Federal Reserve back at its inception in 1913..
..
..as I believe the Bernanke Fed is now repeating errors similar to those committed by the Benjamin Strong Federal Reserve during the late-twenties period.
Benjamin Strong, first head of the Federal Reserve Bank of New York (1914-1928), is a controversial figure. He was the dominant leader at the Fed during the twenties – the Greenspan or Bernanke of that era. And based on one’s historical/ideological perspective, he was either the central bank genius whose death in 1928 left a fateful leadership void at the Fed - or a dominating activist central banker much too eager to intervene in the marketplace and accommodate a historic Bubble.
From “Benjamin Strong, the Federal Reserve, and the Limits to Interwar American Nationalism…,” Priscilla Roberts, Federal Reserve Bank of Richmond Economic Quarterly, Spring 2000):
<blockquote>
“The most notorious episode of monetary ease, however, occurred in July and August 1927, when Strong, though alarmed by the American market’s speculative and inflationary tendencies, nonetheless forced through the Federal Reserve System a decrease in the discount rate from 4 to 3 percent. This move relieved the excessive pressures to which the initial level of American interest rates was subjecting the dangerously shaky [British] pound. In July 1927 the central bankers of Great Britain, the United State, France, and Germany had met on Long Island in the United States to discuss means of strengthening Britain’s gold reserves and the general European currency situation. Strong’s reduction of discount rates… appears to have been the direct result of this conference. Indeed, according to Charles Rist, one of the French central bankers who attended, Strong said that the American authorities would reduce discount rates as “un petit coup de whisky for the stock exchange.’ Strong pushed this reduction through the Federal Reserve System despite strong opposition…”</blockquote>
Throughout the Roaring Twenties, U.S.-based Credit became an increasingly dominant source of finance internationally..
The Great Credit Inflation/Bubble that set the stage for the Great Depression generally commenced with the outbreak of World War I. There are myriad disconcerting parallels between that period and today's ongoing Credit Bubble – including extraordinary technological innovation, U.S. dominance of global finance, major destabilizing financial innovations, expanding use of leverage in financial speculation, and expanding domestic and international financial and economic imbalances..
..
..Clearly, there’s too much left unlearned from the Fed’s checkered 100-year history.'
- Doug Noland,
Bernanke's Comment, July 12, 2013</blockquote>
''Between the middle of 1922 and April 1928, without need, without justification, lightheartedly, irresponsibly, we expanded bank credit by more than twice as much, and in the years which followed we paid a terrible price for this.'<blockquote>'..Anderson expressly states that
<blockquote>'Between the middle of 1922 and April 1928, without need, without justification, lightheartedly, irresponsibly, we expanded bank credit by more than twice as much, and in the years which followed we paid a terrible price for this.</blockquote>
..
The New York Stock Exchange disaster occurred in stages. Between 1926 and 1929 the share index more than doubled, increasing from 100 to 216. The first warning appeared on Thursday, October 24, 1929, when a supply of thirteen million shares was met with an almost nonexistent demand, and prices collapsed. Banks intervened and were able to momentarily suspend the fall, and prices dropped between twelve and twenty-five points. Though the panic was expected to cease over the weekend, the morning of Monday, October 28 brought a new, unstoppable disaster. Over nine million shares were offered for sale, and the market plunged by forty-nine points. The most devastating day was Tuesday, October 29, when thirty-three million shares were offered and the market plummeted by another forty-nine points.
..
102. Murray N. Rothbard concludes his analysis of the Great Depression
in this way:
<blockquote>Economic theory demonstrates that only governmental inflation can generate a boom-and-bust cycle, and that the depression will be prolonged and aggravated by inflationist and other interventionary measures. In contrast to the myth of
laissez-faire, we have shown how government intervention generated the unsound boom of the 1920’s, and how Hoover’s new departure aggravated the Great Depression by massive measures of interference. The guilt for the Great Depression must, at long last, be lifted from the shoulders of the free market economy, and placed where it properly belongs: at the doors of politicians, bureaucrats, and the mass of “enlightened” economists. And in any other depression, past or future, the story will be the same. (Rothbard,
America’s Great Depression, p. 295)</blockquote>
- Jesús Huerta de Soto,
Money, Bank Credit, and Economic Cycles, page(s) 487, 488, 492, 493 & 494</blockquote>
<blockquote>'The Wall Street collapse of September–October 1929 and the Great Depression which followed it were among the most important events of the twentieth century. They made the Second World War possible, though not inevitable, and by undermining confidence in the efficacy of the market and the capitalist system, they helped to explain why the absurdly inefficient and murderous system of Soviet communism survived for so long..'
- <a href="[
mises.org] to the Fifth Edition</a>,
America's Great Depression</blockquote>
Context ‘..disregarded the subjectivist revolution..’<blockquote>
(Planned Chaos) - 'Do we really want a repeat of the upheavals of the 20th century .. because a bunch of interventionists and central planners living in the virtual reality of their 'models'..'((Hapto)praxeology) - '..Mises’s warning to the world .. not to suppress the market rate of interest in the name of creating prosperity.'(Haptopraxeology) 'Austrian Thymologists Who Predicted..' - '..The world has needlessly suffered unspeakable misery..'Banking Reform</blockquote>