[natenthe]

This is one of the worst takes I've read in awhile.

First off, there is no general consensus about the exact cause of the Great Depression and the cause of the recovery. If you're going to make an attempt at a history lesson, at least get it right. We know that the stock market crash and banking panics played a large role in the contraction of economic activity, but there is absolutely no general consensus for the exact causes. Your theory, that was portrayed as a fact, is solely an opinion that is disputed by many economists and historians. Academics are split as to the exact cause of the great depression and stopping deflation made possible by the gold standard is not an accepted fact in any economics or history debate. [1]

Secondly, the Fed providing liquidity is not "stabilizing the price of the USD", as you say. Printing money out of thin air at extreme rates (22% of all dollars were printed in 2020) is massively devaluing the USD and is borrowing against the future of the country, thus ultimately destabilizing the USD. Just like how many things that feel good in the short term are unhealthy for us, providing artificial short term liquidity that ends up destabilizing society long-term is not healthy or intelligent. As we add trillions of dollars of debt to the US balance sheet, we will soon get to a point where the vast majority of federal expenditure will be on interest payments (it is currently less than 10% but increasing exponentially). At that point, the US will either be forced to hike taxes to ridiculous levels to pay down the debt, or will essentially be bankrupted, and the country's assets will be taken over and dissolved to pay back its lenders by some supranational organization.

The only thing you said with a hint of truth was that the Fed is like an engine that serves to move a train. However, the train is off the tracks, not moving the economy forward. The fed is actively destroying the economy by devaluing the USD and destroying the future of this country. Look around you - companies have already started hedging against the dollar and moving into anything that won't surely be devalued at dangerous levels like the USD in the next decade (i.e. Bitcoin). The Fed is being disrupted, similarly to how Amazon disrupted Barnes and Noble, Netflix disrupted BlockBuster, Uber disrupted Taxis, AirBnB disrupted hotels, and so on. The Fed is NOT a not a net positive on society and people are waking up to it. Hence crypto (deflationary in nature) being the highest returning asset in the last decade, appreciating at 200% each year against the dollar, which people are flocking to. The economy will surely be destructured, but it will be away from centralization and the Fed, because it only serves to enrich the monied interests, while putting on a facade that it exists to 'lower unemployment' and 'stabilize the USD'.

[1] https://www.britannica.com/story/causes-of-the-great-depress...

[tylerhou]

I didn’t say the gold standard caused the Depression; I said it exacerbated it. This is well supported by your link and other historical sources.

The point is, without control of the money supply, a government cannot prevent deflationary spirals. Since Fed can print money temporarily, that makes recessions much milder.

You're right, in a sense, that money printing is inflationary. But when money printing happens, it's to avoid a far greater evil: severe deflation.

https://www.history.com/news/how-did-the-gold-standard-contr...

[dedev54]

I disagree with your take, I think its wrong and misleading.

Perhaps the causes of the Great Depression are unknown, but there is consencus that had the Fed stepped in to prevent monetary deflation, the Depression would have been much less severe and ended much earlier.[1]

As for your second point, I would like to point out two things: first, it is indeed possible for the Fed to greatly increase the money supply without causing inflation if the velocity of money decreases, as tends to happen during a pandemic when people cannot go out and buy things in person. Secondly, the US dollar exchange rates have not deviated in a radical manner compared to other currencies, which would imply that things are relatively stable. (besides bitcoin, which I will get to later)

As for the US debt, there is no arguing that it is not a problem, however should the Fed not have acted, it is likely that a Depression would have happened, and the resulting doom loop would have made it impossible to ever pay our current debts, since without stimulus you would never leave the recession.

Now comes the elephant in the room: bitcoin. The only non hedge fund company I know of that actually bought bitcoin is Tesla, which is certainly not a figurehead for other corporations considering how its valuation is larger than the largest carmakers in the world put together despite having a small percent in the market.

Now Im going to be a bit more speculative from here on but I think its an important point.

Bitcoin only proves the supremacy of the dollar, since all people care about is how many dollars they can get from their bitcoin. And indeed, there are no signs bitcoin will actually be used for anything other than speculation, especially since I doubt anyone can tell me how much bitcoin my sandwich would cost.

You're right though about bitcoin being deflationary in nature. Imagine if everyone finally bought into bitcoins incredible returns, and billions of people put their savings into the coin, watching as their wealth grew and grew... except wait a moment, what's this the financial system is hollowed out! Theres no money to make loans with, no money to invest with, not even the most profitable of opportunities? Perhaps people should be lending out bitcoin? But wait we can make more money just sitting on it cant we? After all the less we spend the more money we have?

[1]http://www.employees.csbsju.edu/jolson/ECON315/Whaples212377...

-see the page marked 143

[Lammy]

> but there is absolutely no general consensus for the exact causes

Yeah, in such a complicated system there are so many parties involved that trying to break down one cause seems like an impossibility. All one can do is look at effects and try to speculate backwards from there to see whose incentives may have aligned and who might benefit from the outcomes we got. Maybe nobody, since accidents happen, but in the case of the Great Depression I think it's very interesting to learn how the 1929 stock market crash stemmed the tide of people leaving the south for better-paying industrial jobs in the northeast cities: https://en.wikipedia.org/wiki/Great_Migration_(African_Ameri...

"Between 1910 and 1930, the African-American population increased by about forty percent in Northern states as a result of the migration, mostly in the major cities. The cities of Philadelphia, Detroit, Chicago, Cleveland, Baltimore, and New York City had some of the biggest increases in the early part of the twentieth century. Tens of thousands of blacks were recruited for industrial jobs, such as positions related to the expansion of the Pennsylvania Railroad."

[parasubvert]

Everything you just said is basically wrong.

There IS a consensus understanding to what caused the Great Depression, they only folks who disagree tend to be charlatans pushing Gold or other deflationary bubbles such as Bitcoin.

The world is not going to adopt deflationary currency away from central banks - that would be suicidal.

[MrMan]

I upvoted you