The Great Stock Market Crash of 1929 and subsequent Great Depression followed five years of reckless credit expansion by the Federal Reserve. The Federal Reserve credit expansion in 1924 was in reaction to a business downturn and to assist the Bank of England in its wish to maintain prewar exchange rates. The strong US dollar and the weak British pound were to be readjusted to prewar conditions through a policy of inflation in the United States and deflation in Great Britain.

The credit expansion led to the Roaring Twenties. The volume of farm and urban mortgages expanded from $17 billion in 1921 to $27 billion in 1929. Large increases occurred in industrial, financial, and state and local government indebtedness simultaneously. This Federal Reserve spurred expansion of money and credit led to skyrocketing real-estate and stock prices. Sound familiar? The Federal Reserve is good at one thing – creating bubbles and subsequent busts. Notice how politicians always tell you everything is great. Best economy ever!!!