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Liberty News ForumLNF Forums HereEconomics, Financial News › Crash of 1837 Again?
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Crash of 1837 Again?
May 14th, 2017 at 8:50pm
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180 years ago, on May 10, 1837, the panic of 1837 started. It was a liquidity crisis caused by fractional banking and over lending. The banks were allowed to lend 80% of their deposits. They were required to hold the 20%, usually in silver. Improvements in, resulting in over-production of cotton and cotton based products ended up causing a cutoff of credit, starting in England and back flowing to the United States. 90% of the factories on the east coast of the United States closed causing layoffs of 500K people. The recession lasted till 1844 except in the deep south. After several southern states defaulted on state obligation bonds their credit was adversely affected for many more years. The states defaulted because they wouldn’t accept the privatization of the profits and socialization of the penalties as promoted by the bankers. They didn’t want the Plantation owners to retain their profits and make everyone in the state pay for the defaulted amount.

This is exactly what was imposed on the citizens of the United States when in 2008 the Federal Reserve bought the bad debts and expanded the money supply to cover without any penalties being imposed on the stock brokers and bankers that caused the problems. The Federal Reserve sold Congress and the Country a bill of good about banks being too big to fail and the politicians didn’t have the guts to pressure the financial sector to cover their mistakes and pay the penalty for the bad debts.

8-1/2 years later the country’s debt has doubled and the economy is flat lined with economic mine fields all over the place. The Federal Reserve has charted a course of increasing the debt and printing more money. In the USA, banks are only required to hold 10% of their deposits as reserve and that’s in fiat money. Debt is truncated and sold as investment creating more debt. These investments are called derivatives and total worldwide more than $1.6 Quadrillion. When a significant amount of that debt goes bad, there isn’t enough money in the entire world to cover. We the people will suffer a depression unlike ever seen.
  

Learn all you can, it's a one way trip.
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Re: Crash of 1837 Again?
Reply #1 - May 23rd, 2017 at 1:20pm
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That does seem a nice parallel. I'll have to read up on 1837.
  

"Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." J M Keynes

"In the first place, the dichotomy between "theoretical" and "practical" is a false one. In economics, all arguments are theoretical. And, since economics discusses the real world, these theoretical arguments are by their nature "practical" ones as well." M Rothbard
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