A stock market crash, waves of bank failures, a declining M2 money supply & massive deflation - all are hallmarks of the Great Depression. Some of these same hallmarks have reappeared today.
What a terrific piece. I must point out that while the Fed does offer the BTFP, bank regulators are restricting bank liquidity with rules like the Liquidity Coverage Ratio and onerous capital standards. This forces banks to hoard liquidity, and the Fed is promising to raise capital standards further (Basel 4, etc.), and extend liquidity constraints to smaller banks. Regulators can't seem to grasp the most fundamental thing about banking; Providing liquidity is what banks do! See my blogpost https://cantercap.wordpress.com/2022/10/18/the-looming-liquidity-crisis-and-how-to-fix-it/
Question: with thousands of PhD's on its staff, do you think the Fed has a clue what it is doing? Based on its record from 2020-2022 I suspect the answer is no. I keep thinking of that scene in the movie "Network" where Ned Beaty says "You are meddling with the forces of the universe."
I thought you would be interested in this (and many other) post from my blog cantercap.wordpress.com. I'm trying to get set up on substack, but having issues.
Amazing man, thank you so much! Congratulations! i´m going to translate it to brazilian portuguese.
A modern economy circulating products and services throughout the world doesn’t need money or sovereign countries (national currencies) to be successful. Today, we’ve the scientific knowledge and technological skills to convert our natural and artificial resources into daily life-sustaining deliverables: food, housing, education, healthcare, infrastructure, and employment demands. What we lack is unity, a global framework built upon fair and humane laws and safe and healthy industrial practices. I hypothesize that humanity can end poverty and reduce pollution by abandoning wealth and property rights, and instead adopt and implement an advanced resource management system that can provide “universal protections for all”. Replacing customary political competition altogether, this type of approach, which I named facts-based representation, allows us a better way to govern ourselves and our communities, basing policy and decision making on the latest information, in turn improving the everyday outcomes impacting our personal and professional lives.
Thank you for taking the time to write such an insightful piece. I enjoy reading financial market history and this one has been great. Looking forward to reading more of your work. You have a new subscriber.
A very informative piece. Have you considered private sector debt expansion as a factor in the great depression? My book explains the expansion of household debt in Canada contributing to a huge real estate bubble, which is now starting to burst. "When the bubble bursts: surviving the Canadian real estate crash" 2018 Hilliard MacBeth