Does Capitalist Production Have a Long Cycle? (pt 7)

Eightieth anniversary of start of super-crisis

To understand the policies that are being followed by the governments and central banks today as they combat the aftermath of the panic of last fall and winter, you need to understand the events of 80 years ago. The current governments and central bankers are very much haunted by the ghost of the Depression.

Several weeks ago, I explained how World I and its war economy had led to a huge divergence between prices and values. This contradiction reached it peak in the spring of 1920 and was partially resolved by the deflationary recession of 1920-21. Why then didn’t the Great Depression begin with the deflation of 1920 rather than in 1929?

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