Doug Noland: As Exciting as the 1930s

This is a syndicated repost courtesy of Credit Bubble Bulletin. To view original, click here. Reposted with permission.
‘One trouble with every inflationary creation of credit is that it acts like a delayed time bomb. There is an interval of indefinite and sometimes considerable length between the injection of the stimulant and the resulting speculation. Likewise, there is an interval of a similarly indefinite length of time between the injection of the remedial serum and the lowering of the speculative fever. Once the fever gets under way it generates its own toxics.’ ‘The Memoirs of Herbert Hoover – The Great Depression 1929-1941′
There are few apt comparisons to today’s extraordinary backdrop. Late in the ‘Roaring Twenties’ period offers the closest parallel – the global nature of vulnerabilities and faltering booms; policymaker confusion and increasing ineffectiveness; fundamental deterioration in the face of impenetrable speculative impulses. It was by 1929 deeply embedded in speculator psyche that the enlightened Federal Reserve would never allow a market or economic collapse.

This post was published at Examiner by Doug Noland ‘ November 19, 2016.