James Grant Remembers The Forgotten Depression Of 1921: “The Crash That Cured Itself”

Jon Alternative Media, Banking, Blogosphere, Economy, Fiscal Policies, Government, History, Market Commentary

The Forgotten Depression tells of the slump of 1920-21: high unemployment, collapse in commodity prices, upsurge in bankruptcies and sharp break in stock prices. However, unlike the Great Depression, the 1920 affair was over in 18 months. What explains its brevity? James Grant, publisher of the prestigious Grant’s Interest Rate Observer, tells the story of America’s last governmentally-untreated depression; relatively brief and self-correcting which gave way to the Roaring Twenties…
As ValueWalk.com’s Jacob Wolinksy explains, in 1920 – 21, Woodrow Wilson and Warren G. Harding met a deep economic slump by seeming to ignore it, implementing policies that most twenty-first century economists would call backward. Confronted with plunging prices, wages, and employment, the government balanced the budget and, through the Federal Reserve, raised interest rates. No ‘stimulus’ was administered, and a powerful, job-filled recovery was under way by late in 1921.

This post was published at Zero Hedge on 05/21/2016 –.