Bernanke: Federal Reserve caused Great Depression

[dramama]

MONEYNETDAILY
Bernanke: Federal Reserve
caused Great Depression
Fed chief says, 'We did it. …
very sorry, won't do it again'
Posted: March 19, 2008
9:02 pm Eastern


By David Kupelian
© 2008 WorldNetDaily


Despite the varied theories espoused by many establishment economists, it was none other than the Federal Reserve that caused the Great Depression and the horrific suffering, deprivation and dislocation America and the world experienced in its wake. At least, that's the clearly stated view of current Fed Chairman Ben Bernanke.

The worldwide economic downturn called the Great Depression, which persisted from 1929 until about 1939, was the longest and worst depression ever experienced by the industrialized Western world. While originating in the U.S., it ended up causing drastic declines in output, severe unemployment, and acute deflation in virtually every country on earth. According to the Encyclopedia Britannica, "the Great Depression ranks second only to the Civil War as the gravest crisis in American history."

http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=59405


some of us already knew this didn't we?? :thinking

[Stonewall]

Bernanke will succesfully avoid a repeat of the post-Depression policy of reducing the money supply...but he will fall into a much slower, though deadlier, trap, of unjustified monetary expansion.

But, the reason that the retraction of the money supply was such a huge problem was from the excess creation of money in the early-mid 20's. Then, the huge change in money supply is what triggered the worst of the Depression.

Bernanke is successfully playing the part of the early 20's Fed that really deserves the blame, not acting as a savior who has learned from our mistakes. He will set up the next chairman, or himself much later on, to be forced into a monetary retraction that will, again, have terrible results.

Though, in a fiat monetary system with fractional reserve banking, the fed chairman is between a wolf on one side, and a cliff on the other. In the 20's, the Fed inched too close to the cliff, got scared and ran away from it right into the wolf's mouth. Bernanke is repeating the same early 20's mistake, and inching toward the cliff. And as I said, the next policy will be overly reactionary and conservative to fix Bernanke's problems, and we'll run into the wolf's mouth again. Hope that analogy made sense :)

The cycle will repeat itself: Printing WAY WAY WAY too much money, followed by a massive reduction in monetary supply to make up for it. Bernanke is fulfilling the first half.

Ultimately, though, the problem is with fractional reserve banking. With full reserve banking, there can be no such thing as a bank-run beginning a depression.

[semo]

I saw a documentary on google video (Money Masters ?) that forever opened my eyes to the Federal Reserve.