History 1807 Lecture Notes - Lecture 33: John Maynard Keynes, Glass–Steagall Legislation, Procyclical And Countercyclical
Document Summary
These companies are taking the money and are buying stuff for the themselves or pouring the money back into the company and making them more efficient, productive: stock market crash does not create the great depression. 1920 a lot of people did(cid:374)(cid:859)t ha(cid:448)e the (cid:373)oney to buy the stocks so they were borrowing the money to buy the stocks. Hoover said (cid:374)ot to (cid:449)orr(cid:455) it(cid:859)s a (cid:374)e(cid:272)essar(cid:455) (cid:272)orre(cid:272)ted for a(cid:374) o(cid:448)erheated market. Ba(cid:374)ks go (cid:271)a(cid:374)krupt (cid:271)e(cid:272)ause people do(cid:374)(cid:859)t ha(cid:448)e the (cid:373)o(cid:374)e(cid:455) to (cid:271)a(cid:272)k loa(cid:374)s a(cid:374)d those people also don(cid:859)t have anything for the bank to take so the bank as to take the loss. 1910/20s individuals were encouraging to take their extra money and invest it in to the stock market. The money in the bank would be taken by the bank and the bank would take it and invest it for the stock market for you. If you wanted people to save money you make interest rate high.