http://www.youtube.com/watch?v=gaS-vwZ77x8
6:02
Can anyone debunk this?
The US had several Panics while on the Gold Standard prior to 1929 and never had experienced anything like the Depression. The closest to the Depression was the Recession of 1920 to 1921 in the aftermath of the human disaster of WW1. This little incident was almost as bad as 1929 yet the USA recovered in under 2 years to go into the Roaring 20s.
What these videos don't talk about is that the USA had periods on and off the Gold Standard when economy was much smaller, less diverse and had worse communication systems and yet with all of that the country still never experienced anything like the Depression.
Keep in mind that the Depression went from Oct 1929 to Nov 1953 (24 years) when the Dow Jones finally reached its 1929 high. Consider how poorly that is when the USA created vast amounts of currency during WW2.
This post deserves more answers.
EmbraceLiberty:http://www.youtube.com/watch?v=gaS-vwZ77x8 6:02 Can anyone debunk this?
I know one person who can:
www.youtube.com/watch?v=gaS-vwZ77x8#t=6m24s
http://www.youtube.com/watch?v=gaS-vwZ77x8 6:02 Can anyone debunk this?
Inflation doesn't "grow" the economy, but it can yield, for most, a satisfactory redistribution of the 'weights' of the patterns. Meaning that more money will go to different places. Schiff is right when he says 'legitimate growth' or 'production' are limited in the U.S. due to the colossal amount of foreign produced goods consumed here (imports). But inflation will 'grow' the economy in the sense that it changes the patterns of consumption (and their proportions) which, in a world where the U.S. produced anything, cause more production.
Keynesianism made more sense in a not-quite-so globalized economy. But the planners don't have any other universal justification for social engineering and credit monopolization.
I understand, yet it doesn't really clarify why countries that threw away the gold standard did better. Sure, it might have changed consumption patterns but is that enough to increase overall performance?
Well, it does explain why inflationary countries got out of the depression quicker...They printed money; they increased velocity; they shifted patterns to a quicker "cycle" than they otherwise would have formed.
Just out of interest, why do you define the depression in relation to the DJ as opposed to other markers? And doing so, what is your explanation for the period between the mid-60's and the mid-90's when there was an even longer period of apparent depression?
EmbraceLiberty:I understand, yet it doesn't really clarify why countries that threw away the gold standard did better.
The Earlier You Abandon The GOLD STANDARD and Start Your NEW DEAL, the Better
It was a short term fix. Look at where we are now with fiat money.
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My reasoning is two fold:
1. The start of the Depression was a drop in the Dow Jones from its 1929 high not when the interventions of Hoover and FDR sent the markets down even further and completely disrupted the economy. If the drop identified the start then reaching that level should also signify the end. Otherwise you could have any even/statistic be the end which seemed to me to be inconsistent.
2. This Dow Jones is the best measure of private savings and private equity I know of, if you have another that is more accurate then please suggest it.
I do not believe that 1946 or when ever employment picked up is a reliable indicator of the end of the Depression as the govenrment was in the process of relinquishing control of the economy.
There's no doubt that the inter-war gold-standard was the primary cause of the great depression and abandoning it was the correct move. The problem, of course, is that what took its place turned out to be even worse.
"If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion."
Schiff is right when he says 'legitimate growth' or 'production' are limited in the U.S. due to the colossal amount of foreign produced goods consumed here (imports).
So, should the citizens of San Diego stop importing much of their goods from other parts of the United States? Should people gradually become more autarkic? I've never been impressed by Shiff's argument against the export of manufacturing.
Could he mean some goods (manufacturing capital) but not others?
Schiff is right when he says 'legitimate growth' or 'production' are limited in the U.S. due to the colossal amount of foreign produced goods consumed here (imports). So, should the citizens of San Diego stop importing much of their goods from other parts of the United States? Should people gradually become more autarkic? I've never been impressed by Shiff's argument against the export of manufacturing.
Umm, if people are in SD are importing things from the other parts of the U.S., this is domestic. Schiff and I explicitly state foreign imports as the cause of the weakening of domestic production.
Mercantilism has its plusses in a pragmatic statist world.