A historical note, on what used to be the Great Depression.
By Daniel at 5 December, 2008, 11:55 am
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Sort of hauntingly similar, including Congressional actions (bailouts):
“The Long Depression (1873–1896) affected much of the world and was contemporary with the Second Industrial Revolution. At the time it was regarded as the Great Depression, remaining so until the Great Depression occurred in the 1930s.”
“The causes of the Depression are debated. The primary cause of the depression was a shortage of available money to facilitate trade. The most immediate cause, and the date that is often used as the start of the Depression, was the collapse of the Vienna Stock Exchange on May 9, 1873.”
“In America the speculative nature of financing due to both the greenback which was specie issued to pay for the US Civil War and rampant fraud in the building of the Union Pacific Railway up to 1869 culminated in the Credit Mobilier panic.”
“Because of the Panic of 1873, governments depegged their currencies, to save money … In addition, there were Americans who advocated the continuance of government-issued fiat money (United States Notes) to avoid deflation and promote trade.”
Now, what was the Credit Mobilier panic?
“Credit Mobilier company was designed to limit the liability of stockholders and maximize profits from construction [of the Transcontinental Railroad] with the hefty fees being paid by federal subsidies. The company also gave cheap shares of stock to members of Congress who agreed to support additional funding.”
Ah, history. We have been here before.
http://en.wikipedia.org/
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