The Great Depression - - - the mere mention of this historic tragedy sends shivers through the older generation that experienced it as children.
Even those that lived through it have never really understood the forces that caused such world wide misery. Perhaps because they were too young at that time or were too stressed trying to find work and food to take time to discover the cause.
American history books are woefully inadequate in their descriptions of the Great Depression. A few paragraphs or a simple chapter within only considers a few of what that author considers 'the cause' of the depression. Most of these causes they list were really victims of a financial collapse, and being major financial players their fall, merely launched what we termed the Depression. The Depression really started before their disintegration.
If you study history you will discover the Depression in the USA was much milder than what was experienced in Europe and around the world. The Great Depression of the 30s really began sometime in 1927-1928 - It's effects catapulted pyramidically resulting in the Crash.
The Depression of the Thirties, as will the pending Greater Depression, was and will be caused by super-inflation, brought on by stupid government policies and waste. Super inflation for this article is merely where prices are increasing at a 'far' greater rate than wages and income are able to. "Able To" : this is the key difference in normal inflation and super-inflation.
This super-inflation in the 30s was felt less in the USA than the rest of the world, but what happens in the financial realms of the world does impact every person on planet earth, whether in a large or minute impact. It is sort of a pyramid scheme in collapse.
Europe was the main geographical source of the Depression of the 30s. It had been through a World War, minor wars, reparations, rebuilding, official oppression of nations and peoples -- in effect the government treasuries were drained. One likes to think of government money as 'their' money - but government money is OUR money, placed there by taxes 'allegedly' for our benefit and security.
The Depression in the USA was entirely due to government decisions and policies regarding banking and money. Congress ignored its duties and responsibilities under the Constitution in favor of party politics and the then current party bosses and business/corporate lobbies.
In the middle of a drought in America's bread-basket, which was causing a higher than normal inflation, government banking policies, reflected the "LA$$IZE FAIRE" i.e. "que sera sera" attitude of government towards bankers and banking laws.
Congress, playing party politics, refused to address the problems that congress itself created.
Few people realize there are actually TWO monetary systems in the USA and in most nations around the world, if not all. There is the one we're most familiar with, and that is the official treasury of the government, the entity that orders and is responsible for the printed money you use. The other is the 'credit' money that is created out of thin air by banks, mortgage companies, savings and loans, stock market, hedge funds, money market funds, etc. and etc.
These 'credit' dollars were NOT authorized by the treasury or by congress, but were 'allowed' by congress through lack of oversight and legislation. The credit money is created by simply moving numbers on a balance sheet, and what I call a semantic fraud against all of us.
When you make a deposit to a bank - it is a liability to the bank. The bank has your money and they owe it to you 'on demand.' Yet, YOUR deposit, YOUR money is listed as an A$$ET instead of a liability on the bank's accounting. BY LAW, the bank is not required to keep all YOUR money available to you, only about 10% of your money is 'on hand' at the bank, even though they record ALL your money as their asset.
I bring this up as a simple example of only ONE of the reasons and one of the duties that the government is responsible for, which when ignored causes a full economic depression instead of a simple downturn in business.
In the 30s, in the middle of a drought, the bankers foreclosed on the farmers. Government should have stepped in and stopped this atrocity. Blaming the bankers was the simple thing to do- but the government was responsible for it. Banks do NOT exist in the USA except by government permission and they have to abide by the laws that congress applies to them. Congress should have stepped up and stopped the foreclosures early on, recognizing the cause of the foreclosures was 'outside' the normal realm of market pressures - mainly a drought.
It was a GOP administration and congress that allowed the Depression to happen in the US in the 30s. It was their fallacy of ideology 'that business knows best.' The bankers ran amok, with government permission, and finally resulted in the Wall Street collapse.