{"id":39257,"date":"2018-10-17T06:08:37","date_gmt":"2018-10-17T11:08:37","guid":{"rendered":"http:\/\/olduvai.ca\/?p=39257"},"modified":"2018-10-17T06:08:37","modified_gmt":"2018-10-17T11:08:37","slug":"the-great-depression-ii","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=39257","title":{"rendered":"The Great Depression II"},"content":{"rendered":"
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The Great Depression II<\/a><\/h3>\n<\/header>\n
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Whenever a movie has been a huge hit, the film industry tries to follow it up by doing a sequel. The sequel is almost invariably far more costly, as there\u2019s the anticipation by those who create it that it will be an even bigger blockbuster than the original.<\/p>\n

The Great Depression of the 1930\u2019s is seen by most people to be the be-all and end-all of economic catastrophes and there\u2019s good reason for that. Although the economic cycle has always existed, the period leading up to October 1929 was unusual, as those in the financial sector had become unusually creative.<\/p>\n

Brokers encouraged people to buy into the stock market as heavily as they could afford to. When that business began to level off, they encouraged people to buy on margin. The idea was that the buyer would only put up a fraction of the money for the purchase and the broker would \u201cguarantee\u201d full payment to the seller. As a condition to the agreement, the buyer would have to relinquish to the broker the right to sell his stock at any point that he wished, should he feel the need to do so to get himself off the hook in the event of a significant economic change.<\/p>\n

Both the buyer and the broker were buying stocks with money that neither one had. But the broker entered into the gamble so that he could charge commissions, which he would be paid immediately. The buyer entered into the gamble, as he had been promised by the broker that stocks were \u201cgoing to the moon\u201d and that he\u2019d become rich.<\/p>\n

Banks got into the game, as well. At one time, banks took money on deposit, then lent that money out at interest. They would always retain a percentage of the deposited money within the bank to assure that they could meet whatever the normal demand for withdrawals might be.<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Great Depression II Whenever a movie has been a huge hit, the film industry tries to follow it up by doing a sequel. The sequel is almost invariably far more costly, as there\u2019s the anticipation by those who create it that it will be an even bigger blockbuster than the original. The Great Depression […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1730,63,312,383,2994,6228,11658,536,753],"class_list":["post-39257","post","type-post","status-publish","format-standard","hentry","category-economics","tag-1930s","tag-banks","tag-financial-crisis","tag-great-depression","tag-interest","tag-international-man","tag-jeff-thomas","tag-money","tag-stocks"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/39257","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=39257"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/39257\/revisions"}],"predecessor-version":[{"id":39258,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/39257\/revisions\/39258"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=39257"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=39257"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=39257"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}