Recent comments in /f/pics

RooMagoo t1_itl3c1d wrote

That is a gross over-simplification of an extremely complicated situation. Government, yes; fed alone, no. The Fed certainly played a big role in allowing the recession to become a depression, but they were far from the sole cause. The toxic debt cycle Europe was stuck in repaying American banks for WWI, the Smoot-Hawley tariff Act, the gold standard, stupid repricing of currencies post war and mismanagement of banks all caused/led to the depression.

High interest rates killed farmers because the tariff Act killed commodity prices and there had been a land bubble previously. Farmers couldn't pay their loans to banks which caused over-leveraged banks to fail, taking all deposits with them. That example is just one of the many structural failures that occurred due to a multitude of poor decisions.

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