D... @stra92250 - Twitter Profile

Everyone remembers the crash of 1929. Almost nobody asks where the boom came from. The Federal Reserve created it. Between 1921 and 1929, the Fed expanded the money supply by roughly 61 percent, an increase of about $28 billion in total bank deposits, currency, and other instruments. The expansion was subtler than the printing press running wild in some Weimar sense, which made it more dangerous. Benjamin Strong, the head of the New York Fed, kept interest rates artificially low through open market purchases of government securities and bankers' acceptances. He did much of it as a personal favor to Montagu Norman of the Bank of England, who wanted to prop up the overvalued pound after Britain's blunder of returning to gold at the prewar parity in 1925. American savers got to subsidize British monetary vanity. Nice. Cheap credit does not spread evenly. It floods into the interest-sensitive sectors first: capital goods, construction, the stock market. So you got the Florida land mania, you got skyscrapers rising in Manhattan, you got brokers' loans ballooning from $1.5 billion in 1921 to over $8.5 billion by 1929 as everyone and his shoeshine boy bought stocks on 10 percent margin. The structure of production stretched far beyond what real savings could support. Entrepreneurs read the low rates as a signal that capital was abundant. It wasn't. The Fed had simply forged the signal. This is what the mainstream missed, and still misses: Prices were roughly stable through the decade. Consumer prices barely moved. To Irving Fisher and the early monetarists, stable prices meant no inflation and therefore no problem. Productivity was surging in the 1920s, and prices should have fallen. They would have fallen under honest money. The Fed pumped in just enough new credit to keep prices flat, masking the inflation entirely. The thermometer read normal while the patient ran a fever. So when people tell you the 1929 crash proves capitalism is unstable, ask them who set the interest rate. Ask them who doubled brokers' loans. The boom was the disease. A central bank manufactured a decade of malinvestment, then acted shocked when the bill arrived.

Handre's tweet photo. Everyone remembers the crash of 1929. Almost nobody asks where the boom came from.

The Federal Reserve created it. Between 1921 and 1929, the Fed expanded the money supply by roughly 61 percent, an increase of about $28 billion in total bank deposits, currency, and other instruments. The expansion was subtler than the printing press running wild in some Weimar sense, which made it more dangerous. Benjamin Strong, the head of the New York Fed, kept interest rates artificially low through open market purchases of government securities and bankers' acceptances. He did much of it as a personal favor to Montagu Norman of the Bank of England, who wanted to prop up the overvalued pound after Britain's blunder of returning to gold at the prewar parity in 1925. American savers got to subsidize British monetary vanity. Nice.

Cheap credit does not spread evenly. It floods into the interest-sensitive sectors first: capital goods, construction, the stock market. So you got the Florida land mania, you got skyscrapers rising in Manhattan, you got brokers' loans ballooning from $1.5 billion in 1921 to over $8.5 billion by 1929 as everyone and his shoeshine boy bought stocks on 10 percent margin. The structure of production stretched far beyond what real savings could support. Entrepreneurs read the low rates as a signal that capital was abundant. It wasn't. The Fed had simply forged the signal.

This is what the mainstream missed, and still misses: Prices were roughly stable through the decade. Consumer prices barely moved. To Irving Fisher and the early monetarists, stable prices meant no inflation and therefore no problem. Productivity was surging in the 1920s, and prices should have fallen. They would have fallen under honest money. The Fed pumped in just enough new credit to keep prices flat, masking the inflation entirely. The thermometer read normal while the patient ran a fever.

So when people tell you the 1929 crash proves capitalism is unstable, ask them who set the interest rate. Ask them who doubled brokers' loans. The boom was the disease. A central bank manufactured a decade of malinvestment, then acted shocked when the bill arrived.

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@stra92250

2 days ago

@yuzinhaaaa 👀

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@stra92250

2 days ago

@olucascoin @zorakbr YouTube ou x.?

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2 days ago

@olucascoin @zorakbr 13 milhões de visualizações ?

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2 days ago

@Goticadedireita Tipo o Japão e a Coreia do sul ?

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2 days ago

@GabrielD_Ouro @RenaudAdorno Comoção

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2 days ago

@GabrielD_Ouro @RenaudAdorno A do btg aparece algo como uma briga no roda viva, o programa. Aparece uma foto de ia. Como se tivessem dito que o banconda golpe. Cara, isso não é só aqui que tá acontecendo; na prata tem altas IAs tentando causar comissão no mercado. É o mesmo programa em vários idiomas.

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