By Timothy Birdnow ——Bio and Archives--January 6, 2019
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The Fed had in fact been pursuing a tighter monetary policy since the spring of 1928 and continued this policy until the stock market collapse of October of 1929. If we look at the discount rate the Federal Reserve Bank of New York was charging we get further evidence of this pursuit of tight monetary policy. In 1926 and 1927 the New York Fed's discount was in the range of 3.5 to 4.0 percent. In 1928 it was 3.5 to 5.0 percent. Then in 1929 the range shifted upward to 4.5 to 6.0 percent. In 1930 the range fell back to 2.0 to 4.5 percent. Clearly the Fed was attempting to puncture the speculative boom in the stock market. By 1930 the New York Fed's policy was having its effect. It must have immediately become apparent that the tight money policy was a mistake and the Fed tried to reverse the course but without much success. It was not easy to unpuncture a balloon.And they conclude:
Thus the blame for the Great Depression lies firmly with the failures of the Federal Reserve. This is a blame not only because the Fed did not take counter measures to forestall the economic decline but also that the Fed's actions precipitated the decline in the money supply. Once the Depression was developed the money supply was increased but that did not end the Depression. Once a balloon is punctured it is not easy to re-inflate it.So the Feds' actions in the last year and a half are acting to strangle the economic growth unleashed by the recent tax cuts. Another point to ponder; the rising dollar will hurt developing economies, and the end result will be more economic immigration to the U.S. - something that serves the democratic party well, as all these newcomers will vote for the people who give them the most. Jerome Powell's policy will help overwhelm efforts made by Trump to secure the border, and I suspect he knows it. That is why the Democrats want to raise taxes (to damage the economy and hurt Trump's re-election chances) and at the same time strengthen the dollar, so the markets in Mexico, Central America, and elsewhere weaken and all of their unemployed try to migrate here. Oh, and if there is no wall we can't stop them...
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Timothy Birdnow is a conservative writer and blogger and lives in St. Louis Missouri. His work has appeared in many popular conservative publications including but not limited to The American Thinker, Pajamas Media, Intellectual Conservative and Orthodoxy Today. Tim is a featured contributor to American Daily Reviewand has appeared as a Guest Host on the Heading Right Radio Network. Tim’s website is tbirdnow.mee.nu.