Cloud9 wrote:Two compelling factors got us out of the great depression. First government subsidized a huge expansion of our industrial base which resulted in almost universal employment. Second, rationing combined with almost universal employment built up savings and a huge pent up consumer demand. When the war ended, there was a minor recession followed by the boom years.
Printing paper currencies does not end recessions it collapses economies.
A nice summary.pstarr wrote:I don't disagree with you Cloud, I think WPA helped. But I don't believe that explains everything. The war also helped end the Depression. It put people back to work. So did suburbia in the long term. Let me explain.
I think folks tend to focus on the immediate financial causes of financial collapse instead of seeing the background, the long term trends. The stock market collapse that preceded the Depression was a trigger and so was the mania that preceded the crash.
IMO the cause of the Depression was rapid industrialization of agriculture, communications, and the maturation of the banking system. This caused unemployment and concentration of wealth (the Roaring Twenties). Heavy machinery developed during WWI (treaded tanks, bulldozers, heavy trucks) put farm labor out of work and led to the farm collapse. I think the dust bowl might have been a consequence of the same mechanization, a correlation and not a cause.
The same heavy equipment got us out of the Depression by allowing the modern logging and construction industry. The Great Depression was solved by the suburban housing boom (encourage by government subsidies for low-cost housing lones) and the resulting consumer economy.
vtsnowedin wrote:8) I don't think you can say the holders of US WWII war bonds got wiped out. The interest rate was fair for the times and people did get to cash them in. Now a German war bond that's another matter.
Tyler_JC wrote:But hey, everyone gets paid back, right?
Xenophobe wrote:Tyler_JC wrote:But hey, everyone gets paid back, right?
Yes. But it still sucks.
Tyler, I thought your post was top notch. Any speculation on the best method, generally speaking, to stay ahead of the curve on this one? I assume we invest our money into items which go up at the rate of inflation, or better. Be that real estate, the stock market, or whatever.
Any tips on which mitigation techniques have worked out best, historically?
Tyler_JC wrote:It's important to spread your investments around. Don't keep everything in one asset class or one country.
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