Nothing is wrong with owning those things, but people went into debt chasing the latest and greatest. If you do not believe me, look at the graph below. Another major cause of the Great Depression was the failure of the Federal Reserve. “To provide the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, for other purposes” (The Federal Reserved Act 1913). While reading the chapter and discovering that over 9,000 banks closed their doors, I couldn’t help, but wonder why the Federal Reserve was not doing their job. The first mistake they made was, the Federal Reserve allowed prices to fall into deflation. Another mistake the reserve made, was it did not do anything to stabilize the financial system. When banking panics begin, the Federal Reserve failed to increase money available to banks. The whole banking system of the United States collapsed; people were not able to withdraw, make loans, or even deposit money. Debt and poor decisions made by the Federal Reserve are principle causes of the Great
Nothing is wrong with owning those things, but people went into debt chasing the latest and greatest. If you do not believe me, look at the graph below. Another major cause of the Great Depression was the failure of the Federal Reserve. “To provide the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, for other purposes” (The Federal Reserved Act 1913). While reading the chapter and discovering that over 9,000 banks closed their doors, I couldn’t help, but wonder why the Federal Reserve was not doing their job. The first mistake they made was, the Federal Reserve allowed prices to fall into deflation. Another mistake the reserve made, was it did not do anything to stabilize the financial system. When banking panics begin, the Federal Reserve failed to increase money available to banks. The whole banking system of the United States collapsed; people were not able to withdraw, make loans, or even deposit money. Debt and poor decisions made by the Federal Reserve are principle causes of the Great