Wednesday, 28 January 2009

Turn the clock back 80 years...

Just watched the BBC's docu-drama "1929: The Great Crash". It's here on iPlayer till the weekend.

Similarities are being drawn all over the place between that crash and the Great Depression that followed it, and the current financial situation.

As I watched the programme, these were what particularly struck me as similarities:

- In the late 1920s, before the crash, there were no rules about how much people could borrow. Stock was bought with borrowed money and credit was easily obtainable.

- The Hoover government said everything was fine, the market just kept going up, and the best thing they could do was to leave it alone.

- In the early stages of the crash, the bankers tried to shore up the existing system by providing funding.

- In the aftermath of the crash, there was no short-term commercial credit available, and businesses closed down because of that.

- One of Roosevelt's strategies to try and help ease the situation was to guarantee bank deposits.

History has repeated itself with a vengeance.


1 comment:

  1. Spot on, it's just a shame the we don't seem to learn from our past mistakes.


Please post your comments here. This blog is fully moderated. Any spam or malicious comments will not be published.