What Caused the Great Depression?


One perpetual problem in the comments throughout my economic videos is the misunderstanding of the events that led to the Great Depression. Although I’ve already covered much of this, it occurs to me that it would be beneficial to put all of this information into a single video and take you through the history from start to finish– not only showing you the causes of the Great Depression, but how our government seems determined to make the same mistakes all over again. So, some parts of this video will be repeats of information in other videos, but some of it will be new, and it will all be tied together. First, some quick background: In 1907, a banking crisis occurred–the worst one in American history up to that point. The stock market crashed down to half of what it was when it started, and investors rushed to the banks to get out their cash assets. But our banking system had long been set up as fractional reserve thanks to the National Banking Act of 1862. It was banker J.P. Morgan who realized that he could make money by providing liquidity to the system: he used his assets to make low-interest loans to the banks and to the Treasury, knowing that repayment would be secure when the crisis was over. As a result, the entire banking crisis of 1907 lasted less than two months. The economy recovered over the next year. In 1908, Congress passed the Aldrich坊reeland Act and established the National Monetary Commission to propose regulations in the banking industry to prevent such a panic from happening in the future. In 1913, the Federal Reserve Act created the Federal Reserve banking system and the central banking authority was given control over the money supply. In World War I, money was created to fund the war effort, but since the US was only in the war for a little over a year, it wasn’t as bad as it was in England, where high rates of inflation were experienced. Inflation has the effect of sending false signals into the economy, making the value of items appear to be greater than they really are. Once people realize this, the trend becomes to sell off assets– and easily liquidable assets like stocks are often the first and the most sold– and get whatever amount of money they can for them. This happened in 1921, and led to a stock market crash and a recession which, thanks to the Harding administration taking a hands-off approach, recovered in about a year– like the one which preceded it in 1907. Britain had it worse off, and in 1924, the Federal Reserve began to expand credit in the US in order to help the Bank of England recover. The idea was to inflate the dollar and deflate the pound. This initiated an economic boom, spurred further on by another expansion in 1927, and the Roaring ’20s, well, roared. Although no one at the time knew it (except for a few economists such as Ludwig von Mises and F. A. Hayek), this set the stage for another stock market crash. Once again, prices started to soar. It appeared as if everybody were becoming richer, making more money, but this was an illusion caused by inflation. What happens is, business costs rise along with it, and there comes a point where business costs have risen so much that businesses are no longer profitable. This is what triggers the recession. But the Federal Reserve didn’t want that to happen. In 1928, noticing the problem, they tried injecting still more money into the banking system. All this did was prolong the inevitable. Recessions, while undesirable, are necessary in such a case. It’s kind of like when your car breaks down. It may take a few days to repair, during which time you have to walk or take cabs or bum rides off of people. It’s an inconvenience, but it’s necessary in order to fix the car. But if you try a quick-fix, slapping the malfunctioning parts together with bailing wire and duct tape, you’re not only prolonging the inevitable; you’re making the damage much worse, guaranteeing a longer repair time. And so it is with the economy. The Fed’s credit expansions only delayed the coming recession and made it worse than it would have been. In 1929, fearing runaway inflation, the Fed hit the brakes on the money supply, stopping the expansion of credit. By August, it had raised the Discount Rate to 6%, and in response, time-money rates rose to 8% and call rates to 15 and even 20%. The thing is, it takes awhile for market players to realize that this has happened. For another several weeks, people continued to buy in what they considered a bull market. Then, the proverbial feces hit the equally proverbial radial ventilator. On October 24th, finally realizing what was happening, investors rushed like mad to sell their holdings at whatever price they could get for it. The stock market, as was inevitable, crashed. Despite the situation leading up to it, the recession that immediately followed the crash was relatively mild. Unemployment reached 8.7% in 1930. For the sake of comparison, the unemployment rate in the US for May 2009 was 9.1%. Why, then, did we enter the Great Depression? First we must point the finger at President Herbert Hoover. Unlike Harding, Hoover opposed economic readjustment and instituted central government planning. He urged businesses not to cut prices and wages, but to increase spending. Sound familiar? Then, President Hoobama–I mean, Hoover–embarked in deficit spending and increased funding for public works. President Bushama even–sorry, President Hoover even attempted price supports on wheat, cotton, and other crops. Then came the Smoot-HawleyTariff Act of 1930. This act raised tariffs to unprecedented high levels. This stifled foreign trade and according to most economists was the genuine start of the Great Depression. Other countries raised their tariffs and other trade barriers in response. Unemployment grew all over the world. The passage of the act even prompted another stock market crash. Restriction of imports had the effect–as they always do–of hampering exports as well. The agricultural industry collapsed, taking rural banks with them. The panic spread to banks that remained open. European countries froze the credit of the US and Britain. This led to a collapse of bond credits, and with it the destruction of the investment portfolios of banks in both countries. As if they hadn’t already done enough damage, the Federal government passed the Federal Revenue Act of 1932, which doubled the Income Tax, lowered exemptions, and eliminated the Earned Income Credit. The states followed suit, and the already crippled economy was brought to its knees. The American people voted Hoover out and FDR in. It hardly made a difference. FDR exacerbated the problems created by Hoover, erecting new barriers, seizing private gold holdings, and devaluing the dollar another 40%. He instituted a Minimum Wage, a 35-hour work week, and a ban on teenage labor, but of course all that does is destroy even more jobs and annihilate smaller businesses who just can’t afford all of that extra expense. Unemployment shot up to almost 25%. The South was hit especially hard, blacks and other minorities the hardest. At the same time, banks continued to fail. The Federal Reserve was created just for this purpose: to step in as Lender of Last Resort, creating money to supply liquidity to the banks, preventing more closures. The Fed refused to do this. In 1933 came the worst banking crisis in the history of the United States– the very thing the Fed was created to prevent. The thing about the free market is, it’s both powerful and resilient. Even being stifled as much as it was, it still had one more tool in its arsenal, one that would have solved the whole problem: the Gold Standard. In cases where the dollar is tight, people–and especially foreign banks–will turn in gold in exchange for dollars. Tons of gold came in from overseas, especially Britain. Under the rules of the Gold Standard, the Fed was supposed to use this gold as the basis for the creation of new money. But it didn’t. They just locked the gold away in a vault, and it was as if it didn’t even exist– even worse, since much of the money went to foreign banks in exchange for the gold, the US experienced Capital Flight. The Free Market was cut off at the knees. Contrary to popular belief, the New Deal was of no help at all. People not too well versed in economics, or who are deliberately spinning to support their political policies point to what they call enormous growth in the form of increasing GNP. Indeed, GNP did begin increasing in 1934, by 7.7%, up to 14.1% in 1936, but there are two things that this argument ignores. First, it’s much easier to achieve high growth rates when you’re at rock bottom. If all the money you have is a penny, and you find another penny on the ground, congratulations–you’ve just doubled your money! But how much better off are you, really? The second thing they ignore is, it didn’t last once the New Deal took effect. The biggest rise followed the Supreme Court overturning the National Recovery Administration in 1935 and the Agricultural Adjustment Act in 1936. This was the time of the biggest rise. Then, in May of 1937, GDP started dropping again. This was the year the Wagner Act, passed in 1935 in response to the Supreme Cort overturning the NRA, had its full effect on the economy. Unemployment rose yet again. Then from August 1937 to March 1938, the stock market fell by 50%. Finally, during World War II, the Fed released its stranglehold on the money supply when the government needed to fund the war effort. Of course, most of the money created went straight into the war, but after the war was over, the new money finally got us out of the Great Depression. There’s no reason why that couldn’t have happened immediately and prevented ALL of this. It is plain to see from this that the culprits responsible for the Great Depression are not the free market and the gold standard, but the Federal government and the Federal Reserve Bank. And extremely well-established economic principles predict that the same thing will happen again, if the same course of action is taken. And with President Obama reiterating the myths about the Great Depression, and relying on Works programs and other New Deal-style “solutions,” it seems that our government is entirely determined to repeat the mistakes of the past. George Santayana must be spinning in his grave.

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Comments

  1. This stopped being about my original topic the moment it became clear that you cared more about proving that YOU were right and nobody else.

    For me? This became a personal mission.

    I would do everything in my power to invoke the highest level of stress in you by using your own methods. I would use the evil, immoral tactics that you so prided yourself on for a purpose of good.

    I decided to use exactly your debate tactics from start to finish.

    In a way, I regret doing so.

  2. FSAthe1st, a former subscriber of yours, was right.

    Arguing with an idiot will only bring you down to their level, and they will beat you with experience.

    Shane, feel free to block me. I'd genuinely consider it a point of pride. Feel free to delete my comments, as you have with so many others who have struck at you.

    But know this: I only regret not being able to make you break your computer in a fit of rage. I only regret not being able to make you snap any further.

  3. My only regret is that I wasn't able to make you any more angry than I did. Aside from that? I really regret nothing.

    As to my final words before I ascend to a level of zen in this fine accomplishment of mine?

  4. Not that these terms could not be applied to you. No, because the people that those words described can be put to use in some small way to make this world a better place, or at least have some vaguely redeeming qualities. You, however do not.

  5. Never before in the history of the universe have the forces of the nature come together to create such an abysmally substandard human being such as yourself. What are you? You are a Waste. I don't pity you, I pity the tapeworms that are forced to endure dwelling in your horrid intestinal track.

  6. I pity the water atoms which have passed through the bladders of Great People, be they enlightened rulers, scientists who push forward humanity, heroes who have saved the lives of thousands or simply pleasant, kindhearted and generous folk, now must endure being stuck inside the cell tissues of your horrid being.

  7. The only possible way you could endeavor to make this world a better place is if you went into a chemical waste dump with a sharp rock… not a knife because objects that were shaped by the hands and minds of mankind and the fruits of their efforts deserve some respect, which befouling it with your bodily juices is anything but…

  8. …And stab yourself in the chest, letting your body degrade among corrosive industrial run-off so it may be elevated to its proper level and that the universe would have eighty more kilograms of free material to be turned into anything other than you.

  9. "Editorial integrity? On a wiki?"

    Yes, the measure of the quality of a Wiki is its editorial integrity (and if you knew fuck all about how they work you'd understand that), and the Wikimedia Foundation is second to none in that regard. I again point you to the Nature article comparing Wikipedia to Encyclopaedia Britannica.

  10. "Is this before or after it gives you the message that you have to confirm you're a human being before posting?"

    You don't get that when posting to your own channel, moron.

  11. "Shane, I opened with trying to be civil with you."

    We've debunked that long ago. As other users have confirmed, you came in hostile.

  12. Again, if you have to resort to FSAthe1st for support you've automatically lost.

    I'd only block you if you broke the rules, which you only did once and were given a warning for.

  13. Wow. All those posts in such a short time span.

    Yeah, I think the phrase "butthurt" DEFINITELY applies here…

  14. "Unlike standard dictionaries, it is written collaboratively by volunteers"

    And unlike standard encyclopedias, Wikipedia is written collaboratively by volunteers.

    And I remind you that your claim was: "And the Wiktionary, being a wiki, is a part of a constantly updating encyclopedia of words. No matter if it can be utilized as a dictionary, it remains an encyclopedia"

    Move those goal posts, LIAR.

  15. "This makes both sites nonviable as sources in any argument."

    Fine, keep ignoring the Nature article…

    YOU were the one who first resorted to Wikipedia, or need I remind you?

  16. Mr.Slayer,you're not in the position to lecture me on grammar with those error prone posts. The focus is that your comprehension skills are way beneath the norms. I used "ur" and "u" in attempt to not pass the word count. I'm pretty sure a 10 year old could figure that out knowing the limitations of youtube posts. It's really fascinating that someone as ignorant as you exists .

  17. I don't adhere 100% to any one school's ideas. I think both Austrian theory and Monetarism have their points to make. I also think that Austrians downplay the role of the monetary system in describing how the depression was being extended, and that Monetarists downplay other factors.

  18. yeah. alright. penny stocks have been booming in past 2 years and thats the great way to make money from trading fast. dont think its funny, Best way to invest your money in stocks is to be a member of a renowned professional assistance team. i found it here : bit.ly/15GOCOw?=ywxzuz

  19. Numbers don't lie. However liars use numbers to lie. One must know the methods of their derivative type of calculations. If it sounds too good and/or simple then it probably flawed or false. History never exactly repeats, however and it is quite fluid depending on the perspective of the view of the historian. A currency based economy is a false economy…one must monitor the pulse of the middle class (if one still exists).

  20. Interesting. Why would you ask me that? Have you promoted me to Royalty, your Highness? (Since this is your video.) Personally, I would NOT consider them a society, rather a form of tyranny. I would assume you would have your loyal servants inform you of your soldiers' attitude. So, you still play Dungeons and Dragons games?

  21. "Interesting. Why would you ask me that? Have you promoted me to Royalty, your Highness?"

    Geez…what a moronic evasion of the point! YOU were the one that said societies could only be viewed by "the pulse of the middle class" (whatever that means). I pointed out that throughout most of history there HASN'T been a middle class! It's recent development. And this is your response.

    "Personally, I would NOT consider them a society"

    No True Scotsman fallacy.

  22. That's very interesting. Evasion? How much more direct than stating this direct answer: "I would assume you would have your loyal servants inform you of your soldiers' attitude." You grasped nothing of my statement that the foot soldiers would be considered middle class? This is strong evidence that you have no useful reasoning skills, probably due to no real working life observation experience. Just a book scholar vomiting recorded flawed information from some other book scholar..

  23. "There hasn't been a middle class! It's recent development."
    Wow, that must be a new concept. Like there is no middle in a finite line? True a healthy middle class was a "post WWII" development and personal experience 1978 was my best year, according to my income and the FedGov't CPI numbers. All in all, your video is probably closest to most accurate discussion that I have watched, read, Man, it has been years since I fixed a car with baling wire!

  24. That was a personal attack. Nice to know you consider those to be direct answers.

    Slaves ARE NOT MIDDLE CLASS. It's completely desperate–and borderline racist–of you to even SUGGEST such a thing!

  25. "Wow, that must be a new concept. Like there is no middle in a finite line?"

    Your capacity for dishonesty continues to amaze me! Are you REALLY saying there was some kind of gradual gradation from the poor to the rich? NO ONE with any knowledge of ancient societies believes that!

  26. What personal attack? Your delusional. Look up the word servant! racist? yoiu dumb fuck! I'm way in the back ground walking from the computer section to the USB RF section. It has been fun screwing with your mind trying to teach you a thing or two. But, I am going to give up on you after today. Bye.

  27. Another amazing non-answer.

    So you have NO justification for your assertion that "monitor[ing] the pulse of the middle class" is the only way to do it, nor information on how to look at societies with no middle class (which is, most of them throughout history).

    Glad we cleared that up.

  28. Finite things have a middle – therefore your statement that previous societies had no middle class is FALSE – now if you would like to refine your statement to state that no societies have had a middle class with any substantial wealth or political power other than the United State until the 1950 thru the1970's then I would concur. Man do you have a bloated ego, I would think you should have wised up by age 40 with your education. I let you go back to your myths. Bye.

  29. "Finite things have a middle"

    Wow. Just wow. I've heard of the Excluded Middle fallacy, but this is the first time I've seen someone assert that there's ALWAYS a middle!

    So, what's the middle between not pregnant and pregnant? Between guilty and not guilty? Between God existing and God not existing?

  30. Measurable things have a middle, but you can have binary things which have do not have a middle. And there is a specific definition to a middle class, it is not just "the class in the middle".

  31. lmao nice try, but learn to use a dictionary – middle class has no specific definition – it differs with each era of time and each society – Go view Steven Stoft's two videos and try to deny his facts. Afterwards you can go back star gazing & your fairy-tale myths.

  32. Okay if it has no definition then you cannot prove it has ever existed either.
    Know what you shit you are spouting before you vomit nonsense. I don't have time to waste on no-name nobodies "facts".

  33. "lmao nice try, but learn to use a dictionary – middle class has no specific definition"

    Funny, all the dictionaries I looked in have a definition for it. Most economic and sociological texts follow the definition of Max Weber, who defined it as those who have a high ratio of wealth to political power. Weber made this distinction to point out that they don't belong in the proletariat where Marx placed them.

  34. I know, right? He went from "You have to look at the middle class" to "The middle class has no specific definition" almost without missing a beat!

  35. "lmao, venusbeatnik had your ass for lunch and then IGNORED your future futile attempts !!!"

    Wow… so he won the debate because he ignored my refutations? That's how it works?

  36. Well, actually he probably didn't realized you made more refutations, since you changed it to your Google+ account. Yes, and no for "That's how it works?" Per my Life Lesson 9, the answer is yes. Otherwise it was a judgement call by yours truly. I'll share one of my Life Lesson's, however I forget it's number > "Never admit to seeing an UFO." I'll admit that it doesn't hold water to Fact # 83 about Shane Killian. LOL It must be nice to have so much free time at such a young age. KUDO's

  37. YouTube moved EVERYBODY to Google+. And it's absolutely still linked to the shanedk channel. Sorry, but that IS NOT AN EXCUSE.

    "LOL It must be nice to have so much free time at such a young age."

    I'm 45, MORON.

  38. Well, 45 years might be old for a MORON. However, I don't think I would label myself as one. Hummmm, maybe I should make that my Life Lesson # 11. Nae, think I'll keep Life Lessons at 10.

  39. So basically what you're saying is that if we banned the federal reserve, got our gold and silver back from their vaults, and borrowed money from the bank of Canada, (as well the American version).  And printed our own money based upon the gold standard instead of borrowing useless paper company money that's printed out of thin air and based upon nothing but speculation from a private bank, the federal reserve, that we can only spend at the company store.  As well as letting them print as much of our useless, valueless paper company money as they wish, thereby causing crashes and booms at whims that benefit only the federal reserve.  Then we can thereby put the brakes on the well meaning presidents and prime ministers and stop them from having to take such actions as to setup safety nets for their citizens whom voted them in, due to the economy crashing and booming destroying people's lives at the whim of a private criminal organization whose robbing us blind of our precious resources.  I agree…  Ban the Fed…

  40. My two cents worth as to what caused the great depression…

    Herbert Hoover was the punching bag for what many viewed as allowing the great depression to happen. The Hoover flag were empty pockets as a symbol of a president that cause economic mayhem and left everybody penniless. The Federal Reserve is the second punching bag when there is economic strife, i.e. something we can vent our anger for the misery that is the result of economic disasters . To this day the public has been directed to the wrong persons to blame for the economic mayhem. But to find the real culprit one needs to read about a history hidden from most of us. It starts with a group of people getting exceeding rich through counterfeiting, and an eventual political takeover.

    Above all the misery, the lost of lives, the protest that were never televised I could safely say that if the American people truly understood the root cause of the great depression, there would not be a partisan debate, as there would not be a banker left unjailed, to put it mildly. Through three centuries of maneuvering the media, the courts, and politicians certain bankers emerge victoriously. The source of their great wealth was a scheme which allowed them to make a nation's economy depend on counterfeiting. This scheme is called FRACTIONAL RESERVE LENDING. The attribute of money is that it is fungible and does not get used up, like other commodities (such as grains when it is used for food). Imagine if we were allowed to freely copy and distribute DVD movies? But when you rent a DVD movie, you are explicitly told not to copy and distribute the movie.  Why is that illegal?  Because if you copy and distribute the movie, the movie creators would loose profit as a result of the EFFECT of the counterfeiting. Fractional Reserve Lending is not much different than freely copying DVD movies.

    Centuries hence, bankers learned that when gold was deposited for safe keeping in their vaults, and a receipt was issued which read “PAY BEARER ON DEMAND”, the actual gold saw very little activity as the gold receipts were used as money.

    Eventually, the bankers decided to loan the receipts rather than the actual gold, but demanded that they be paid back in gold. What was happening was that the bankers were counterfeiting receipts when they made loans: for instance for one pound of gold there could be 8 pounds of titles (receipts) to that gold. The bankers understood that they first needed to control the media, the courts and the politicians otherwise they would be jailed for embezzlement. Since Fractional Reserve Lending is a European import, we can start with a court case there: "Money, when paid into a bank, ceases altogether to be the money of the principal; it is then the money of the banker, who is bound to an equivalent by paying a similar sum to that deposited with him when he is asked for it… The money placed in the custody of a banker is, to all intents and purposes, the money of the banker, to do with it as he pleases; he is guilty of no breach of trust in employing it; he is not answerable to the principal if he puts it into jeopardy, if he engages in a hazardous speculation; he is not bound to keep it or deal with it as the property of his principal; but he is, of course, answerable for the amount, because he has contracted." – 1848 in the House of Lords, in Foley v. Hill and Others. What the courts failed to consider, amongst many things, is the EFFECT: money does not get used up but bounces around the economy falsely. Falsely since there is an initial principal.

      Back in the states, Nicholas Biddle was paying the newspapers twenty two thousand dollars (in today's money) and bribing politicians, such as senator Daniel Webster. He also threatened president Andrew Jackson with a recession by manipulating credit: “Our only safety is in pursuing a steady course of firm restriction” which resulted in the panic of 1937.

    In the 1916 Jp Morgan was said to have gained control of the newspapers, the main form of information for the masses back then: “In March, 1915, the J.P. Morgan interests, the steel, ship building and powder interests and their subsidiary organizations, got together 12 men high up in the newspaper world and employed them to select the most influential newspapers in the United States and sufficient number of them to control generally the policy of the daily press in the United States.” J.P. Morgan Interests Buy 25 of America's Leading Newspapers and Insert Editors U.S. Congressional Record February 9, 1917, page 2947. If you doubt media control look how much the general population knows about money, the difference between federal reserve notes, and united states notes. Who is buys treasury bonds. What is the relationship between the sale of new bonds and the repurchase of old bonds? Most people will not know anything about this despite the fact that money is the prime reason we spend most of our lives working.

    The FEDERAL RESERVE was not created so that it profits. RATHER it was created so that a select few private insider commercial banks become extremely profitable as the result of their ties to the FEDERAL RESERVE, and its ability to subsidize FRACTIONAL RESERVE LENDING. These commercial banks control the Federal Reserve and its policies.  The FED, for example, carry out policies that causes little banks to fail.  These failed banks are taken over by the big insider banks furthering the consolidation of the nation's monetary reserve. 

    Much have been written about the great depression and many attribute it to Hoover's Smoot–Hawley Tariff Act That does not mean that Smoot Hawley was good policy. It clearly harmed world trade and many other countries. But this does not change the fact that the fall in the value of US exports from 1929 onwards – owing to Smoot Hawley, retaliatory tariffs, non tariff barriers, and trade war – does not explain the depth of the contraction of US GNP from 1929 to 1933. Other factors were clearly involved, which drove the collapse of investment and consumption. Others attribute it simply to the severe money contraction. But money contraction is merely a SYMPTOM and not the root cause, because there are elements introduced in an economy which can disturbed the equilibrium.

    There are varied elements which could throw Equilibrium, and cause the so called business cycle. but non are more prevalent, historically speaking, as an excessive expansion of the money supply and a subsequent contraction. What causes the expansion and the boom is easy credit and the multiplicity effect. If you have $100k and deposit it in a bank, the bank can loan the $100k to someone else. What happens, though, is that the person that borrows the money soon uses it to buy something, a house, perhaps and the seller of the house takes that money and most likely deposits it in a bank, perhaps the same bank or a different bank. What happens is that the bank that just received that $100k will loan that money out again, and the inflationary cycle continues. The Money supply expands. In this situation there are two conflicting contracts: 1)the person that deposits it and can have it at any time and 2) the person that borrows it for 30 years. The Burst part of the business cycle is the result of a tightening of credit which is required to counter the interest payments since credit, ex niholo, only creates the principal and not the interest. Why would any group engineer a BOOM-BURST cycle? If you know of an impending severe depression, how would you invest? When is it easiest to purchase real estate, businesses, if you have lots of money? Is it in a stable economy or in a depressed economy?

    In the case of the Great Depression the banks have been lending counterfeit receipts.

    When the public heard rumors of a troubled economy they ran to the banks to pull out their gold deposit as per contract “pay bearer on demand”. On June 1929 There were 3 billion dollars worth of gold in banks, but there were 69 billion of  receipts (Federal Reserve Notes – pay bearer on demand ) in excess.

     

    There is simply not enough gold to counter the gold receipts. People ran to the banks to redeem their paper receipt only to find out that there was no gold left.  In a credit currency economy the money eventually contracts exponentially. This spell economic disaster, which it did.

    We could falsely debate about the Fiat v Gold currency. The real debate lies in Fiat-Gold v Credit Currency, since Credit currency accounts for more than 98% of the money in circulation. The question then posed here is: HOW many times do you need to fall off your bicycle and idiotically hit your head in the pavement before you fix the floppy wheel in the front?  How many times do we need to have the same 'ol boom-burst cycles before we require a separation of bank and state, and the end of FRACTIONAL RESERVE LENDING? And more importantly how can you effect this when every key leading individuals are on the take?

  41. despite the misery brought about by joblessness, despite the homelessness and the great lost of personal wealth we find that the people did not have a direction to remedy the problem. Instead we got a leader who confiscated the gold from the good people and sent it in trainloads to Fort Knox. Today we are not certain if the gold is there. We got a leader that did not go after the criminals who counterfeited gold notes. The American Public were given the Federal Reserve Notes "pay bearer on demand" and "This note is legal tender for all debts, public and private, and it is redeemable in lawful money at the United States Treasury, or at any Federal Reserve Bank" far in excess of the actual gold supply. There were an excess of 71 billion of those paper notes but only 3 billion in gold reserves. The banks had expanded the nations money supply with the multiplicity effect of the fractional reserve lending scheme. In times of economic uncertainty gold was a secure means of transaction. But, then, it was made illegal to possess, because financial institutions counterfeited loans.

  42. separation of bank and state.  educate the masses about money creation, end the fed, end fractional reserve lending.  Let Congress take responsibility.  And the people that vote this politicians in. 

  43. The federal reserve caused the great depression by withdrawing a huge percentage of the money supply. People simply didn't have enough cash to do business. The federal reserve is privately owned by Jews. So the Jews did this to America. Then there was deflation, and the Jews bought up a lot of land and businesses so they became even richer.

  44. All the dumb, ignorant people of America thought Roosevelt was great and elected him 4 times because he pretended to want to help poor people. Then he screwed over the people, and the stupid people didn't even know he had betrayed them. Some of the intelligent people knew it, but they were outnumbered by the stupid people. The exact same thing happened with Obama. He lied almost all the time and told people he was for the poor people. So all the stupid people voted form him twice, and all he has done is screw us over, created a police state, and moved us further to a communist country. My own mother is an idiot and she loves Obama. She is ignorant and stupid and she believes Obama is a good man. She's fucking clueless. My IQ is literally about double what her IQ is.

  45. You talked about the Federal Reserve & US Government causing the great depression, but you didn't explain why they did that. The reason is that the fed & gov were and are controlled by jews, who want to impoverish and enslave the rest of us. The depression enabled the jews to buy businesses cheaply and become richer. The new deal was a big leap towards communism. Jews want to make the world communist, because communism is really a system designed to enslave all non jews and give all power and property to the jews. The claim that communism exists to help poor workers is a lie to fool people into supporting communism. They tell you that they want to help you, then after the communists win, they turn everyone into slaves and kill all the best non-jewish people.

  46. is this a chicago explanation or an austrian explanation? even though you mention mises and hayek it sounds more like chicago to me.

  47. Americans really profited from both world wars ….. and then they like to portray themselves as the saviours. Disgraceful. Anyway, good vid. 

  48. Everyone who thinks Bush caused the 2008 crisis NEEDS to watch this video i'll post here. https://www.youtube.com/watch?v=GcZ28QOl94g

  49. What about the economy now, the economic system is bad world wide, not like then. I think we are headed for an even worse depression, do you?

  50. This argument is flawless, I 100% agree as long as we remember that the Fed was at that time, and still is, private and owned by bankers, or bankers friends. The government has only a power of suggestion. The Fed take its own decisions.

  51. Your attempted parallels between the Great Depression and the Obama presidency border on the ridiculous. Further, your equating of a government "hands off" approach to recovery is asinine.

  52. So… Now that time has passed and we have not had a depression because of Obama as you so jokingly predicted, do you feel like a jackass? Or do you just shrug it off and still blame Obama? Legit curious.

  53. Inflation was not the 'sin' as the money is recollected in fraction as the current flows through the market. The sin rather was in American policy ending the lucrative slave trade and change of positions in cotton, grain, sugar etc. As the benefactors of the 'foreign economies' such as the Catholic as well as the British and lessor European Corporations saw their currents grow weak many felt a sense of disloyalty to the American Government especially its banks. There were preceding events which took place leading up to each depression and while the poster here would like to enshrine the Federal Reserve and said private bankers as protectors of our shared prosperity, -there is no evidence to back up this claim.

  54. Jesus, in schools, they teach everyone that Hoover was a non interventionist and that was the reason for the depression.

  55. When we learned about this in school, the way we learned about this was that "Herbert Hoover's laissez-faire approach to economic reform did nothing to help the economy, but FDR's New Deal was what got us out of it. And people say public school teaching isn't biased.

  56. The difference between an economist and a great economist is the ability to foresee unintended and indirect consequences to a given action within the economy.

  57. The answer to the title question is government. The only valid responses thereafter are "explain" or "provide more details." Any teacher that responds "wrong" is an ignoramus.

  58. Actually, I don't agree — the Great Depression was NOT an economic event, it was a socio-cultural event. What actually happened is that most of the world's population lost faith in democracy & — quite reasonably & accurately — believed that the fate of the world would be decided by force of arms. Thus, the economy never recovered (not just because of government intervention) because no one thought economic policy mattered. Who cares what your economic policies might be if Hitler's going to invade you? Etc. The reason the GD ended when we ramped up for war is because US entry into the War meant our side was going to win. Long story short, a rational MARKET (which reflects the sum total of human knowledge) knew that WWII was coming and that WWII would render all other decisions moot. Why start a business until you know how WWII will turn out? Once the US began its massive build-up, the market knew how the war would turn out & the GD ended. In short, government spending did NOT end the GD except in the very odd facts of this war. Let me illustrate with an analogy: if a massive tidal wave were about to hit America, our economy would go down NO MATTER WHAT the government's economic policies were. If the government spent a ton to build a system to stop the wave, the economy would recover. There's no stimulus effect in a Keynesian sense; rather, it's just government policy working. Likewise, building an army to defeat Hitler et al did not STIMULATE the economy; it simply solved the problem that plagued the economy. To be fair, I don't think the market can solve a problem like Hitler, but I don't think the government can solve most problems — which is why Keynesian stimulus doesn't usually work (even though it worked in this one instance). Sorry that was a long answer, but it's a complex point.

  59. of course it's government intervention what else is new should we really be surprised at this point

  60. What a bunch of crap. Trysting facts to provoke a desired affect does not work. Well, it does work for stupid people. Enough with the propaganda, you are all my slaves.

  61. You are full of shit whach Trump run the stock market. The student debt will bury the country now and the long term. The crashes come from greed and nothing else.

  62. Runaway capitalism caused the depression plain and simple. Wherever "free enterprise" is let in without any enforceable demands for accountability, then free reign to corrupt "thoroughly" inevitably follows. If you don't understand that fundamental concept then you're a koch bought libertarian sympathiser who needs to grow up or you're a Ayn Rand hypocrit who'll end up begging for disability benefits just like she said she wouldn't.

  63. Very good run down of the events leading up to and helping prolong the Great Depression except, unless I missed you making the point, the Fed also pulled out over $1 billion in hard currency after the stock market collapsed.

    Someone once taught me that to see history clearly you must be able to see what the distinctions or difference was prior to and then following a major event. So what virtually vanished from the American marketplace as a result of the Great Depression?

    Find that answer and you will see what today's elites, banksters, political usual suspects and even the teleprompter reader's association doesn't want you knowing or understanding. Happy Hunting!

  64. Can you link your sources here? I would also like for you to have an educational bio so teachers can check it and trust you.

    I had mistaken something Hoover did for something FDR did.
    and I would like you to talk about the new deal and if it really helped.
    I was worried that history was written by the victors who did not live in that time, if it did help then I can say that it's an exception to what the government usually does. I would like you to source so my teachers could see where you get your info so they could tell if it's fact though I trust the both of you. I just thought the state might have written history with their own bias and had sonehow put FDR's new deal in a positive light.

    I just did it again didn't I?I thought I changed.
    I'm sorry to all of you on how I acted recently.
    And although I think they should have watched this video to check if you're wrong instead if just looking at the top results on google I still shouldn't have used this video to write a quiz essay.
    I just don't know how economics other then your videos so I'm not confident enough to try and judge it myself since those packets are all I'm given at school, I just want the facts and if what they said was indeed fact then I'll have to deal with it.

    idk how my spanish teacher got to the conclusion you're only doing it for clicks and views but they called you that.
    and they never even looked at your website, but I don't blame them, they were also raised on what the state gave them and it's fine if they refuse to check anything else.
    the worry that you pray and mislead others.
    I want to clearify things myself but I got school and other projects. I'll research this myself and make my own video, I'll do my requests for you.
    and hey I'll research and make an 11 minute video talkong about consepts like your quickes.

    5 in each video.
    and 15 minute or longer videos on economics and other things to explain things like this.

    and hey I just have to hope akhad academy is good when it comes to economics since Idk where else I can learn economics to a deeper level.

    and again I just want facts; I should just worry about 3 things
    1; is it a primary source?
    2; is the author biased?
    3; would their bias cloud their judgment?

    I hope this helped. I hope you can forgive me.

    one more thing; I'll make my own avatars.

    Tl;dr I want to get the facts and I wasn't sure that these books were accurae because of other books I had seen on Eso's channel and I thought that it was rewritten be people who thought it helped but I would like to know that what teachers say is true since I don't want to deny anything since my spanish teacher compared what I was scared of with holocost denial…….

    and that eats me up………………

    להיות ספקנית לגבי מה שיש בספרים שנבדקו על ידי הממשלה ולרצות הוכחות הוא שונה מלהתעלם מעובדות לגמרי.

    It's not that I don't trust the teachers I don't trust the state in giving unbiased books.

    but what do I know?

  65. The transcript for the English CC at 01:20 states "Aldrich坊reeland Act" instead of "Aldrich – Vreeland Act". Any idea as to why the "坊" is in there?

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