[quote=AN]What was the interest during the great depression?
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10 year treasury rates declined during the Great Depression. From 3.6 in 1929 to 1.95 in 1941. Then then went up once we got involved in the war.
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Were we the currency reserved?
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I’d assume you mean were we the reserve currency at the time. The answer would probably be no but during the great depression ‘beggar thy neighbor’ of currency devaluation in order to increase competitiveness was prevalent. Seems a lot like the current version of currency wars where central banks are desperately trying to devalue right now. Reserve status probably doesn’t really play much of a role in all honesty, but if you think it does then by all means elaborate.
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We we the super power then as we are today?
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Why does our super power status matter in terms of deflation or inflation. Not sure what the point is here.
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Also, if you’re counting a great depression as a possibility, then shouldn’t you also count in a hyper inflation as a possibility where you have to cart around a wheel barrel to buy a loaf of bread?
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I believe I did with this comment
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Certainly congress could cause hyper inflation. They could credit everybody’s bank account with $1 billion dollars but that would detonate ever retirement portfolio in the world in a matter of minutes. One person’s debt is another person’s credit. You can’t get rid of the debt without getting rid of the corresponding credit. Although that’s pretty much the game the economists play in their solutions to the problem. Solve one side of the equation and bury the loss on the other side of the equation with complexity.
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The reason I discount the possibility of hyper inflation more so than deflation and depression is that hyper inflation makes every debt worthless and blows up all the big banks, social security, medicare and every pension fund in the nation. It also takes an act of congress rather than an act of the fed to come into play. Will congress do something dumb enough to produce hyper inflation. Maybe but considering it would blow up the banking institution and the campaign contributions I doubt it. It think it’s easier to bleed off bad debt in deflation politically. The government give away program that leads to hyper inflation will probably look pretty good on paper before it blows up into hyper inflation.
