1 reply to this topic

[tommyt]

Bernanke was rumoured to be seen walking with a bottle in a paperbag

[mike123]

Bernanke was rumoured to be seen walking with a bottle in a paperbag

1929

1) In the first place, the Federal Reserve decided to defend the value of the dollar above anything and imposed higher interest rates in order to prevent the money from being turned into gold. The obvious happened, the heavily indebted consumers repudiated their debts due to the rise in interest rates and triggered a banking crisis.

2) Secondly, the FED dried up the economy by keeping the money supply very tight. This submerged the nation in a cash flow crisis and aggravated the crash in both the stock and real estate markets.