Refuting The Myths Of The First Great Depression

Great Myths of the Great Depression

NOTE:  The easiest way to read this research paper is to click the 'fullscreen' option at the top of the widget.  Hope this helps.

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[DailyBail]

PRINCETON, NJ -- Republicans lead by 51% to 41% among registered voters in Gallup weekly tracking of 2010 congressional voting preferences. The 10-percentage-point lead is the GOP's largest so far this year and is its largest in Gallup's history of tracking the midterm generic ballot for Congress.

http://www.gallup.com/poll/142718/GOP-Unprecedented-Lead-Generic-Ballot.aspx

[John]

Bernanke likes to remind everyone that he is an expert on the great depression and knows how to prevent it from happening again in the US. Apparently he is also an expert on Japan and its struggle with chronic deflation following its housing bubble in the 1980's. In fact Bernanke wrote an article in 2000 titled "Japanese Monetary Policy: A Case of Self-Induced Paralysis," where he goes on to lecture BOJ officials about what they could and should have done differently in order to to avoid a deflationary outcome. He goes on to postulate that the BOJ was not trying hard enough to stimulate the economy and that 0% interest rates are just one tool to beat deflation. The Fed Chairmen even goes so far as to assert that he knows how to escape a liquidity trap caused by 0% interest rates. The reason I bring this up is because it gives people a good idea of what Bernanke's next move may be. The US is dangerously close to falling into the dreaded "liquidity trap" as deflation takes hold and monetary policy loses its effectiveness.

Here are some of his suggestions to the BOJ:
http://blackswaninsights.blogspot.com/2010/08/bernanke-explains-how-to-escape.html

[DailyBail]

John...we are in the liquidity trap as Keynesians call it right now...bernanke is out of options...he's got NOTHING left short of assets purchases and as Chris Whalen wrote this morning, those won't work...

Is that your blog you linked?...nice work...good to have another voice around...

[mark mchugh]

Option 6 from John's link is Bernanke only move. He can make it rain money on Main Street and create inflation. Of course, if you wait too long before you take this option, the currency won't devalue - it'll collapse.

The conclusions in that article are correct.