Great Depression

>>1855142
After reviewing the available literature it seems to me that the consensus amongst most economic scholars is that all the money went to the jews.

>>1855159
>>/pol/

>>1855142
https://youtu.be/jK8JGpCmDw8

>>1855142
Did they think to check under the cushions?

It was never there in the first place

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I remember asking my professor last year in my class on the US from 1900-1945 this same question and I got pretty much this guys response: >>1855243

People buying on the margins artificially inflated stock prices.

>>1855260
Then they realized it was worthless and tried to cash out all at once

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>>1855269
Which wouldn't have created as huge a problem if it wasn't the banks who were heavily invested in the market. Bank failure is what directly hurt most Americans, the stock market crash merely precipitated that.

And of course that's all taking a very simplistic view of the whole thing, if I could definitively explain what caused the Great Depression I'd win a Noble Prize in economics.

I remember reading something about how literally everyone, even people in rural one horse towns had a significant amount of money on wall street in the '20s. Fuck I wish I could remember more.

>>1855315
And that's why the FDIC was founded. We might have had recessions and economic downturns since then, but that has prevented another depression from happening.

>inb4 yet
Before the Great Depression we had one every 20 or so years in a painful boom-bust cycle. That we managed to break out of it for even this long is astounding.

>>1855327
See I remember reading the exact opposite, most people weren't invested in the stock market. Bank failures are what directly hurt them the most.

>>1855327
>>1855342
It was a little of both. Banks were heavy into using depositor funds in the stock market, and people were buying practically everything on credit. When the market collapsed, it cut everyone's legs out from under them.

>>1855353
Which is why we need laws like Glass-Steagall

There never was as much money as you think there was.
The world doesn't run on money. It runs on credit. Banks never have enough cash on hand to pay everybody back who has deposited there, just as all the bank customers who took out a loan would never all have the money on hand if the bank called it back. Banks usually only kept a percentage of a person's savings at any given time. Imagine if a man brought $1000 to the bank for savings. The bank takes $900 of that and gives it as a loan to somebody, who also puts it in a bank, which is leant out further. What you eventually get is a monetary base that is expanding at a very rapid rate, while the amount of dollars that exist hasn't actually gone up.

When the stock market crashed on Black Friday (then recovered later that day, but then had Black Monday-Wednesday the following week), everybody tried to get their cash out at once. Banks didn't have the cash on hand, or simply told people to come back in half an hour and they closed in the meantime. Because the FDIC was not a thing (guaranteeing $100,000 of savings in a bank account), if the bank you stored money in went under, your savings were gone, hence the obvious cycle of panic that broke out.

Cash became less fluid and the Federal Reserve failed their first big test.

Fractional Reserve Banking.

They money only exist as a concept on paper. When the house of cards collapses. The money on paper vanishes.

>>1855142
Jews

>>1855411
So long story short, banks inflate worth because they have a bunch of IOU and expect to get that money at some point in time to pay of all of the IOU they have given out.

Or did I miss the point?

>>1855142
The money didn't physically exist. Instead it was credit based upon loans.

But, in 1929 when the market burst and drained the credit reserves (usually causes a recession) the fall was so steep that it started to eat into the physical money reserves.
In 1930 this led to bank runs and bank collapses, which further drained credit and physical cash from the investment economy.
Once the investment economy started getting dragged down, a lot of investment stopped flowing to productive enterprises altogether and instead became physical cash. With less money chasing the same amount of goods, this led to deflation in the economy which further incentivized saving cash instead of putting it into the investment economy.

Eventually, in 1933 the New Deal established the FDIC (stops most bank runs), injected money directly into the investment economy (credit flowed to productive enteprises again), and increased the cash chasing after goods in the economy (causing the inflation that made people desperate to spend and invest before it lost value).

Essentially, the money never existed in the first place, but the confidence and trust that the cash would eventually appear, did exist.

>>1857567
Professional economists still don't know the proximate causes, but here's a great explanation of the aftermath (why it became a depression).
http://www.paecon.net/PAEReview/issue58/Koo58.pdf

>>1857598
>With less money chasing the same amount of goods,
it should be inflation, no?

>>1857614
>"no"

>>1857628
>What is the law of supply and demand.

Go back to your econ 101

>>1857633
>With less money chasing the same amount of goods,
>leads to inflation

Are you fucking retarded?

If there were 100000 dollars in existence and 10 horses, and now there are 10 dollars, assuming a rational economy then your dollar is now worth 100 times more horses.

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People buy goods
They have less money to buy those goods
>I do expect the prices to go down, not to go up

This is what Marxists. believe

>>1857643
>1000*

Whoops

Anyway, I seriously hope you just mistyped here>>1857614
because it's idiotic.

>>1857644
If there is less money in the system to buy the goods, then, assuming a functioning economy, your diminshed money is still worth as many goods.

>>1857644
>"Price deflation is a fall in general prices…which happens either when the growth of the economy outpaces the growth of the money supply;or the drop in the money supply outpaces the contraction of the economy. It can also happen when people simply stop spending in anticipation of lower prices later."