Who bought up the cheap assets in the early 30s?

[Hygro]

During the Great Depression asset prices plummeted. People or institutions surely bought up these assets. Who were they?

 

[Ajidica]

During the Great Depression asset prices plummeted. People or institutions surely bought up these assets. Who were they?

If there isn't enough credit floating around to buy said assets, it doesn't matter how low the assets get.

 

[Hygro]

A stock market trading low is still trading.
Levantine, did anyone later buy that from the government?

 

[Hygro]

It'd be super cool to figure it out more specifically.

The Fed for four years defended gold, raising interest rates and trying to let the depression run its course as a cleansing agent or some other common-sense drive policy error.

Except someone somewhere was weathering and buying up cheap assets. I would imagine there was some massive consolidation at some point, before the fed reversed course and allowed industry to flourish again.

It'd be interesting to know who those winners were in the various countries.

 

[Agent327]

US economy had improved greatly since the crash by 1940 and 41. This is why the US was so capable in sending literally any request for materials the USSR and Great Britain asked for before finally joining the war.

There is literally no connection whatsoever between these two statements. First, the US economy didn't completely recover until well into WW II - meaning it played an integral part in that recovery. Second, the US sending material was a political decision (by the government), and had nothing to with any perceived economic recovery from a financial depression.

 

[Lexicus]

Actually it's kinda the other way around...the US decided it would meet the military hardware requests and that was what got it out of the Depression.

 

[Agent327]

I'm sorry, but that's also not true.

I don't know where you get your information from. The US was able to meet all the requests made to them for military hardware because by 1939-1941, it was recovered from the Great Depression.

Some key points:

- In 1940 US exports had begun to boom, and were the same as in 1929 (i.e. when the depression hit).
- Unemployment rate in 1940 was the lowest it had been since the crash.*

(There are even some economists who don't consider recovery from the Great Depression complete until after WW II.)

But here's the main point:

The US was able to meet all the requests made to them for military hardware because by 1939-1941, it was recovered from the Great Depression.

The one simply doesn't follow from the other: the US would have been able to meet these request at any point in time.

* The government began heavy military spending in 1940, and started drafting millions of young men that year;[46] by 1945, 17 million had entered service to their country. But that was not enough to absorb all the unemployed.

 

[r16]

not me , but surely it should have been done , considering money is like the sole religion of this world .


test , this is a test , letter ı is written ... Considering old posts are like made unreadable .

 

[r16]

During the Great Depression asset prices plummeted. People or institutions surely bought up these assets. Who were they?

detroit arrived big time in the airplane biznez , it took a debacle the size of Vietnam to stop auto bosses being obsessed about capturing all possible engineering venues for themselves . It took the end of the Cold War to allow Cheney to consolidate the rest into "solidly dependable" companies . That's why it takes Lockmart like 30 years to field the Footpad .

 

[Kyriakos]

Usually when there is a great depression in one of those countries that can trigger it, a massive or even world war follows.

 

[Lexicus]

Did you even look at the source?

Just what you directly took out of it and posted here. Reading over it more fully I don't think it disproves anything I've said; the important causal factor in getting the US out of the Depression (I would add the qualifier "fully" there) was the government spending on the military and on military production beginning at the end of the '30s.

Your own link says at one point that getting off the gold standard enabled governments to pursue expansionary policy which was the major force getting us out of the Depression. I basically agree with that view; the political constraints on productive deficit spending prevented full recovery until the war removed those constraints.

Ultimately I suppose it depends on one's definition of a 'recovery.' Some economists will say the real recovery doesn't come until we get where we would have been had the growth of the 1920s continued through the 30s; some might say that recovery happens when we reach the point we were at in 1929 before the crash.

 

[Agent327]

A very reasonable view.

Did you even look at the source?

Provide evidence to the contrary.

I can't quite match these two remarks.

The marks are not measured starting November 1 of 1929. They account for the whole year, including the prosperity before the crash took grip of the nation in November.

I am fully aware.

US industrial output during the depression was at record lows. Exports dropped in millions. What are you basing your statements on? You do understand the consequences an economic depression has on a nation's industrial and export capacity, correct? You also do realize that the United States had to refuse some of Great Britain's and USSR's requests for materials during the war, right?

Not really. I do know the USSR actually refused some of the shipments sent. But that apart, by this time the US itself was basically waging war on two fronts. That said, WW II was probably the best thing that ever happened to the US economically.

During the height of what you claim to be the surge of industrial output, because the US was not looking at fielding its troops adequately, it could not field its allies. This was in 1943 and 1944. US production was unmatched back then. So how do you figure if we can't meet requirements during the height of total war production, were we going to meet it in 1933?

There were no such requests in 1933. However, if there had been, they would have provided a tremendous economic boost.

One - notice the number of employed Americans at the start of 1940 in the graph? Notice how it goes up several million DURING that year? Notice that it's tied to "drafting of millions"? It has to be a clue...

Two - the same quote you linked to, coming from the same section that I'm going to reference now, not only talks about how by 1940 employment was at record highs, but, and I quote, "By 1939, the effects of the 1937 recession had disappeared" Before the draft. Before the GRADUAL conversion of the economy to a war-time one.

The 1937 recession came on top of the 1929 depression, which was far from over by 1937.

Third - here's another cited source from that same wikipedia page; http://www.independent.org/newsroom/article.asp?id=138 As cited in further reading. Scroll down until you see employment rates for 1940-1949, and take note of the "non-defense employment" fields. Then take note the Residuum, and read the first line under the notes about what Residuum is.

You clearly don't read sourced materials I provide, and clearly require me to read ones you provide to show you things you missed in the ones you provided yourself. What's the deal?

Interesting that you should mention the Deal. The New Deal was instrumental in economic recovery, as I'm sure you know. However, it was unpopular in right wing circles (Socialism, Socialist state building and what have you). So, in 1937 Roosevelt decided to cut back on the big spending and aim for a balanced budget. The immediate result was the 1937 recession, from which again recovery was needed.

Secondly, I'm sure there's still a ton of sources out there we haven't even begun to cover yet. That, however, is not the point. Now, nobody is arguing that the US economy was not on the way to recovery by 1940. Unemployment, while no longer at the disastrous level of 25 %, still accounted for over 1 in 10 of people in the workforce.[/QUOTE]

 

[Timsup2nothin]

If there isn't enough credit floating around to buy said assets, it doesn't matter how low the assets get.

Remember that the great depression came at the end of a long sequence of boom/bust cycles. People were still well familiar with the idea of hoarding cash in anticipation of a bust. Certainly while some people were buying and driving the boom there were others preparing for the bust. Those people had cash, and benefited from the collapse. There is always a bear.

 

[Agent327]

The remarkable thing about the Great Depression is that it was largely solved by public enterprise. I'm sure that in the event some people got rich. But if you have unemployment rates from 25 (US) to 33 % (Germany) that's hardly a concern of any interest.

Having said that, there may be an economic study into this particular question. If so, I've never heard of it. I'd suggest asking a professor of economics or, lacking that, posting the question on https://www.quora.com

 

[Flying Pig]

Remember that the great depression came at the end of a long sequence of boom/bust cycles. People were still well familiar with the idea of hoarding cash in anticipation of a bust. Certainly while some people were buying and driving the boom there were others preparing for the bust. Those people had cash, and benefited from the collapse. There is always a bear.

It might even be said that that was the whole problem - that governments, particularly France, were doing exactly that with gold. Between 1927 and 1932, France's share of the world gold supply went from 7% to 27%, effectively taking a fifth of the world's gold out of circulation, and creating an artificial shortage, at a time when nearly all major economies were (back) on the gold standard. This was a major reason why prices declined so dramatically over the Depression, which was exactly what was going wrong: when prices are going down, nobody wants to invest anything, because it isn't profitable to buy goods knowing that they'll be worth less when you come to sell them, or to buy machinery, build infrastructure and so on when you know that your competitor who does the same next year will come away richer than you.