The Birth of a Vampire

The Birth of a Vampire



86 years ago, from the Black Thursday on the New York Stock Exchange, the Great Depression began

October 24 1929 of the year occurred an event whose significance is difficult to overestimate: “Black Thursday”, the collapse of the New York Stock Exchange, which led to the Great Depression - the most famous economic crisis of recent centuries. 86 years - the date is not round; however, the event is not one of those that are celebrated with picnics and evening fireworks.

Nevertheless, there are many reasons to believe that it was the Great Depression that made the United States the state that we know now. Let's see how it was.

Shareholders are housewives and shoemakers


To begin with, we will find out from which height America has fallen into the economic abyss, how successful the 20s were for it.

World War I allowed the States not only to pay off their debts, but also to issue loans to 11 billion dollars for European allies (the purchasing power of the dollar in 1920's was 12,2 times higher than now). Military orders spurred growth in the real sectors of the economy: in the early 1920's, the US accounted for 50% of world coal production, about 60% of iron and steel smelting, 75% of oil production.

Since the Allies paid a significant part of the supplies with gold, the States accumulated in their vaults almost half of the world's precious metal stock. American overseas investment increased from 2,6 billion to 7 billion dollars. In fact, American investors bought most of the deposits in Latin America and the Caribbean.

Economic growth has led to an increase in the well-being of a significant part of the population. Formed a middle class in the current sense of the term. Naturally, enterprising Americans could not begin to invest free money in securities and stock exchange transactions, since all conditions were good for this: a huge number of exchanges, professional brokers, growing profits of tens of thousands of companies. Stocks bought everything: workers and movie stars, shop owners, clerks and housewives. Well-known banker and financier John Pierpont Morgan recalled that a few weeks before the market crash, a street shoemaker asked him if the shares of the railway company he had bought would be profitable.

American inhabitants could not even imagine that this celebration of life would soon end.

Margin Loans: Disaster Trigger


By the end of 20's, the inertia of post-war reconstruction weakened. Available markets have been exhausted, labor productivity has ceased to grow, and investment efficiency has begun to fall. An overproduction crisis was brewing, dragging deflation behind. First, the Americans stopped buying housing, then cars.

However, these were only macroeconomic prerequisites for the coming crisis, which had little effect on the behavior of market participants. The real trigger of the financial catastrophe was the shares of the margin loan.

A feature of these securities was that they could be bought for only 10% of the nominal value. Unpaid 90% was a kind of loan issued by a brokerage firm to its client. Thanks to this, even poor clerks could play on the exchange of significant assets. However, the devil, as always, was in the details. The agreement had a clause that allowed the broker to require the holder of the securities to contribute the missing part of the value of the shares within 24 hours.

The fact that brokers massively took out loans to buy securities from banks made the seemingly well-being of stock exchange even more fragile. Existing portfolios of stocks and bonds acted as collateral.

Thus, millions of Americans (according to some estimates - almost the entire working population of the United States) one day were on the hook at brokerage houses. And those, in turn, were in exactly the same position with respect to the banks.

Black Thursday


October 24 1929, several banks suddenly stopped issuing loans to brokers for more than one day. This forced speculators to sell shares bought in debt in order to pay off loans, otherwise they were threatened with the loss of all assets.

Already by 11 o'clock in the morning, an hour after the opening of trading on the New York Stock Exchange, Wall Street was in panic. On this day, 12,6 million securities were sold: some of the players still had the means to buy cheapening stocks. The vice-president of the exchange Richard Whitney himself, trying to save the situation, spent around several hours about 250 million dollars to buy blue chips. Admittedly, he almost managed to stop the panic. Nevertheless, the Dow Jones business activity index fell by 11% by the end of trading. Financiers and newspaper workers immediately called this day “Black Thursday”, not knowing that it would look light gray against the background of subsequent events.


Dow Jones Industrial Average in 1929 — 1930 Schedule: www.wikipedia.org

On Friday, however, the situation did not improve. Brokers threw on the market another 30 million shares. The flywheel of panic gradually unwound, and the snowball of the financial collapse was already sweeping down, expanding before our eyes. The term “Black Friday” was born, and it must be admitted that the shade of gray really thickened.

The downtrend continued after the weekend. It was on Monday, October 28, the exchange finally went into an uncontrollable peak. If in the first two days the big bankers were still trying to play on the stock market fall, now this was out of the question. In the American calendar, there are two more dark days of the week - Monday and Tuesday.

The first wave of bankruptcies began, followed by suicide. One of the first victims of the collapse of Wall Street were the gunners James Riordan and Jesse Livermore; then a large resonance received a double suicide of clerks who had a joint brokerage account: holding hands, they jumped off the roof of a skyscraper. In the following weeks, in the words of the famous American comedian Eddie Cantor, the hotel administrators had a habit of asking new guests: “Do you need a room to sleep or jump?” (For sleeping or jumping?).

By the end of the week, the US stock market had lost 30 billion dollars - more than the United States had spent for the entire First World War.

Nuclear explosion effect


It is unlikely that the collapse of the exchange initially thought of as an uncontrollable process. Most likely, its organizers planned to buy the most attractive assets on the cheap with the subsequent correction. However, the genie burst from the bottle and healed his own life.

Bearing losses, banks began to close credit lines for industrial enterprises. Citizens who lost part of their savings on the stock exchange (there were at least 25 million of such savings) rushed to withdraw funds from deposits en masse. Banks faced liquidity shortages; lack of funds led to bankruptcies, and those, of course, spurred panic among the population. The spiral of the shortage of means of payment, the demands to fulfill obligations and bankruptcies unwound more and more and eventually destroyed 16 thousands of credit institutions.

The bearish trend has spread from the stock market to the commodity exchange: 5 in November there was a collapse in wheat prices. During the auction, its price dropped to almost zero, no one wanted to buy cereal. A week later, cotton prices collapsed in a similar way.

The explosion wave of stock market collapse diverged across the American economy, sweeping one segment after another. The collapse of the banking sector led to massive ruin of enterprises. Over the next few years, 135 747 enterprises and firms went bankrupt. The 19 railway companies went bankrupt. The businessmen who stood on their feet chose to cut costs and began mass layoffs, which killed consumer demand in the bud, and with it their own future.

15 million Americans - 18% of the working population - have lost their jobs. By 1932, the number of unemployed increased to 17 million; another 60 million had part-time employment. And only 10% of citizens of 125-million of the country could boast of full-fledged jobs.

The crisis has reached agriculture: 5 million farmers are left without land, unable to pay taxes or pay off debts. The situation was paradoxical: in the cities, millions of Americans suffered from hunger, and agricultural producers had no one to sell milk, meat, fruits and vegetables. About 7,4 million people became victims of hunger during the years of the Great Depression. Newspapers reported that residents of small cities began to eat grass, shoot dogs and squirrels.

Bitter pills, or the great division of America


In 1932, President Herbert Hoover was replaced by Franklin Delano Roosevelt. Having inherited the Great Depression, he immediately followed the path of hard state planning. Understanding that the most radical means are needed for the treatment of the economy, he was ready to use them.

The Roosevelt program, dubbed the "New Deal", is devoted to hundreds of monographs and textbooks, plus one investigation by the US Supreme Court. The judges retroactively recognized the president’s economic policy as completely unconstitutional. And - just completely acquitted her.


President Franklin Delano Roosevelt. Photo: AR

Roosevelt devalued the dollar and announced a bank holiday in the country. This was necessary so that citizens would not withdraw deposits until their savings were devalued. The Americans were forbidden to own monetary gold: all bars and coins were ordered to be handed over to the state before 1 in May 1933. Attempting to conceal a piece of precious metal threatened with ten years in prison. It is noteworthy that under Roosevelt, the state bought gold at the price of 20,66 dollars per troy ounce. The right of possession of the yellow metal was returned to the Americans only in the 1975 year, when an ounce was already worth 195 dollars. 42, the most democratic state in the world, deprived citizens of the right to invest savings in assets that are not subject to aging, deterioration and devaluation.

War as a lifeline


In parallel, the process of consolidation of the banking system was going on: the surviving large banks bought up small and medium-sized credit organizations. The Federal Reserve System, which began lending to partner banks, did not stand aside either. The state conducted a separation of commercial and investment banks, allocating direct loans to industry and transport companies. Farmers ’debts were restructured and partially written off. A course was taken to reduce unemployment and create jobs. Roosevelt and his team managed to reduce the fall in GDP, increase employment and stabilize the financial system.

However, the effect of all these measures remained unstable. In 1937, the president tried to balance the budget by reducing government spending — and the United States immediately covered the second wave of recession.

It is difficult to say how long the crisis would have lasted if it were not for the Second World War. Huge military orders, and then the help of a crushed Europe allowed the American economy to recover steady growth. However, it was not at all the kind of economy that collapsed 15 years ago into the nether Great Depression.

America needs your hemoglobin


The States learned how to conduct macroeconomic policies, realized the perniciousness of deflation, and learned how to manage the money supply. The collapse of the British colonial system opened up previously inaccessible markets for American producers, and the approval of the dollar as a global currency allowed the export of money to begin, minimizing the emission risks of emissions. The democratic power has learned to live in debt, to stimulate production with expectations of growing consumption, and to lend to its citizens for decades to come.

But most importantly, American politicians and financiers finally realized the tremendous power and significance of the war as the most effective doping and fuel for their economies. Since then, for more than half a century, America has been living and developing thanks to the policy of "little victorious wars." As soon as the country is facing another recession, the authorities already know what to do. The pathetic rhetoric of the next war raises the share prices of companies associated with the military-industrial complex; on the expectations of military orders, the exchange prices of metals and oil are rising, and the life-giving stream of dollars rushes into the manufacturing sectors.

The United States has chosen the path of not a phoenix, but a vampire: smart, ruthless, able to fly and, most importantly, immortal as long as it can be fed by someone else's hemoglobin. It was on “black Thursday” of October 24, 86 years ago, that the reincarnation of an ordinary capitalist state into a global superharvest began.
Ctrl Enter

Noticed a mistake Highlight text and press. Ctrl + Enter

19 comments
Information
Dear reader, to leave comments on the publication, you must to register.

I have an account? Sign in

  1. mishastich 30 October 2015 12: 06 New
    • 23
    • 0
    +23
    Chic article. I read without interruption.
    The United States chose the path not of a phoenix, but of a vampire: smart, merciless, able to fly and, most importantly, immortal as long as you can be fed by other people's hemoglobin. (C) - I will replicate it according to my friends.
    1. The comment was deleted.
    2. The comment was deleted.
    3. Now we are free 30 October 2015 12: 42 New
      • 10
      • 0
      +10
      A good analogy with a vampire if we take into account that the symbol of the USA is -Hekata- (the ancient Greek goddess of moonlight, the underworld and everything mysterious. She was also the goddess of witches, poisonous plants and many other witchcraft attributes) ...
      Carefully look at the picture does not any statue look like? A statue meeting all the people floating in the "heart of the USA" city of New York ...
      -The sword has changed the word, but the snake is flame ...
      At the same time, it is noteworthy how US policy in modern realities was described by one of the modern French philosophers-publicists. For a long time studying the dirty, bloody and unprincipled US foreign policy in the world while maintaining a halo of paradise within the United States itself, he gave it a very precise definition - EXTERNAL FASCISM.
      It is with this term that one can answer the question that periodically both foreign and domestic levers like to ask -Well, if that’s how you say the Fascist state, then why are people so eager to go there and there really are such good conditions for developing their business if you have an idea and perseverance in achieving it? The answer is simple, becoming a US citizen, you are now obligated to turn a blind eye to everything that your new beloved homeland abroad creates. In general, as in the old truth -And if you feel good somewhere, then sit and do not tweet ...
      You can stick your opinion about real democracy, freedom of speech, observance of universally recognized norms in yourself ... or simply from ... from the blessed States! Being burdened with family property acquired by his own labor and just a desire to live better and calmer, a person in 99.9% does this and puts his opinion in himself ....

      Soft does not mean warm and warm does not mean the truth ... At the same time, with all the "Hollywood" ostentatious patriotism with Mexican trumpets waving behind the flag at sunset and a palm pressed to the heart, the patriotism of US citizens is simulated and hypocritical, because the Great Depression is repeated I would see how many "Patriots" will remain in the United States. And if you also take into account the ease with which you can now move between countries and continents thanks to the logistics developed over the past hundred years ...
      The USA is just a territory where it’s convenient / profitable to exist while knowing that you will not be bombed “Because you are undemocratic,” nothing more. Paradise of opportunists and opportunists (which does not detract from the fact that a lot of talented and hardworking people work and live in the USA) BUT they are the ones who will quietly move to Canada, Australia, Great Britain if something serious happened like their Yellowstone eruption in their “Beloved Homeland”, relapse of the Great Depression or a serious armed conflict with an equal enemy.

      Thanks to your house, let's go to another ...
      1. afdjhbn67 30 October 2015 12: 48 New
        • 2
        • 0
        +2
        Quote: Now we are free
        A statue meeting all the people floating in the "heart of the USA" city of New York ...

        This statue was presented by France, from the idea to bronze casting ..
        1. Now we are free 30 October 2015 13: 09 New
          • 5
          • 0
          +5
          Quote: afdjhbn67
          This statue was presented by France, from the idea to bronze casting ..

          I agree, BUT few people are interested in the cause-effect relationship, but everyone is interested in the result ... Result - "The Face of America" ​​we see ...

          P.S. It seems that the French gave the Americans a statue with implication, as if anticipating that the monster would grow out of the youngest and most democratic state ...
        2. The comment was deleted.
        3. The comment was deleted.
        4. tomket 1 November 2015 22: 10 New
          • 0
          • 0
          0
          Quote: afdjhbn67
          This statue was presented by France, from the idea to bronze casting ..

          Some Freemasons presented the statue to other Freemasons. Given that France was still that Masonic swamp. By the way, the same Dan Brown describes in some detail what this or that architectural stone structure means.
    4. The comment was deleted.
    5. afdjhbn67 30 October 2015 12: 56 New
      • 1
      • 0
      +1
      Quote: mishastich
      I will replicate according to friends.

      better only the last two paragraphs, the rest is fine, you can publish in the Wall Street Journal wassat
  2. Sasha 19871987 30 October 2015 12: 13 New
    • 9
    • 0
    +9
    an excellent article, that’s how they about rose in two world wars, this article is necessary for children in schools to read, so that they know their overseas “friends” in person ...
    1. ivan bogomolov 30 October 2015 12: 44 New
      • 4
      • 0
      +4
      And the worst thing is that they began to create these wars themselves and will never back down from it. negative
  3. iliitchitch 30 October 2015 12: 20 New
    • 5
    • 0
    +5
    I read and thought, and what kind of bolt is the whole world economy tied to some stocks, nichrome is 100% unsecured, except for greed, figuratively speaking; some debt obligations, which can be paid, or maybe not? Etc. This is me to the fact that if no one had grabbed a LOAN, DEBT, MORTGAGE, and again, etc. - so there would be no world crises. Live within your means, and you will be respected.
    1. demon1978 30 October 2015 12: 38 New
      • 4
      • 0
      +4
      Quote: iliitch
      This is me to the fact that if no one had grabbed a LOAN, DEBT, MORTGAGE, and again, etc. - so there would be no world crises. Live within your means, and you will be respected.


      I completely agree with you, but there is a big BUT - it's long and hard request it’s easier to “bake” a green cutlet and on the principle of “buy a brick, otherwise the surgeon will have to remove it from your head” and exchange it for the necessary resources request
      1. iliitchitch 30 October 2015 13: 23 New
        • 0
        • 0
        0
        Well, not all the same aggressive. There are herbivores. "The principle of the hamster," snatched a piece, and into the hole. And the idiots think that it was imperceptible. Everyone saw, but no matter how, because themselves are the same. Have you thought about the AVALANCHE process? Yes, not where there. And extracting bricks from someone else’s Bosch is, in my opinion, a favorite pastime of homo sapiens.
        1. demon1978 30 October 2015 15: 25 New
          • 1
          • 0
          +1
          Quote: iliitch
          Have you thought about the AVALANCHE process? Yes, not where there. And extracting bricks from someone else’s Bosch is, in my opinion, a favorite pastime of homo sapiens.


          Tell the narik, sitting tightly on the Fed needle, about the avalanche and negativity of the processes occurring in his body request You are guaranteed democratization yes
  4. leo3972 30 October 2015 12: 29 New
    • 6
    • 0
    +6
    very good article, I read in a choke. Thanks to the author. good
  5. Basil50 30 October 2015 12: 34 New
    • 6
    • 0
    +6
    And all the same, there are people even with higher education, sometimes with more than one, for whom America and the Americans are * higher * beings, the subordination of which is a duty for humanity. And they don’t see any crime in being on the content. The entire economy of the United States is based on robbery and extortion. Not just there is such a huge army, the most expensive, more expensive than all the armies combined. And attempts to at least somehow explain the growth of the * economy * of the USA without an army and wars are unsuccessful. Speculation technology and the spread of * insider * rumors does not remove the fact that the United States, as a country, is a private joint-stock company. The joint-stock private enterprise prints the money, representatives of the private * business * in the government, legislators are also representatives of the private business (which they are very proud of), as well as the structure of the official bribery under the Senate and senators, moreover, taxes are paid from this bribery. Of course, everything is much more complicated, but politics is also based on bribing governments and collecting compromising materials which they then blackmail. There are many examples of this, but for those already bought and wanting to sell this, they don’t see anything * criminal *, it turns out to be normal for them. And so it will be until the * shooting * of all such figures begins. Including * cultural figures *.
    Even more surprising is how the USA annul internationally signed and ratified international treaties; they say the new administration is not responsible for the previous administration.
    1. Army soldier2 30 October 2015 17: 18 New
      • 1
      • 0
      +1
      It is not a matter of education, but of the philosophy and worldview of these individuals. In readiness for everything for the sake of familiarizing with the “arbiters of fate”
      If I’m not mistaken, Ivan Franko has these words about courtiers: "I want to be a duel, I want a bi piv duli, abi pid the most pique (in translation: at least a muzzle, at least half a muzzle, just under the nose)."
      Sounds like the philosophy of our liberals?
      1. Basil50 30 October 2015 19: 06 New
        • 0
        • 0
        0
        Philosophy is based on logic and facts, and these * worldviews * are based only on the size of payment. I do not believe in * worldviews * contrary to logic.
    2. The comment was deleted.
  6. Alekseir162 30 October 2015 12: 41 New
    • 4
    • 0
    +4
    An excellent article on the fact that more than one hour is spent on lectures is described in an accessible language. Thank you so much.
  7. 1398727 30 October 2015 12: 52 New
    • 4
    • 0
    +4
    15 million Americans - 18% of the working population - have lost their jobs. By 1932, the number of unemployed increased to 17 million; another 60 million had part-time employment. And only 10% of citizens of 125-million of the country could boast of full-fledged jobs.

    The crisis has reached agriculture: 5 million farmers are left without land, unable to pay taxes or pay off debts. The situation was paradoxical: in the cities, millions of Americans suffered from hunger, and agricultural producers had no one to sell milk, meat, fruits and vegetables. About 7,4 million people became victims of hunger during the years of the Great Depression. Newspapers reported that residents of small cities began to eat grass, shoot dogs and squirrels.


    And our liberals, they carefully hung it on the "bloody regime" of the USSR.
  8. gladysheff2010 30 October 2015 13: 00 New
    • 3
    • 0
    +3
    The current freedom in the USA:
    - a US citizen can freely get into his neighbor’s pocket (there are many ways),
    - he can freely resort to the help of a lawyer, eliminating the claims of a neighbor in court,
    - a US citizen can continue to develop, following this path under the protection of the American Themis,
    - Having passed the “thorny and difficult” path, a US citizen can run for power,
    - freely transferring his experience to the younger generation, a US citizen creates a "bright future"
    for any "free" citizens of other countries, regardless of their moral qualities.
    A article hi single "+", thanks!
  9. Denis Skiff 30 October 2015 13: 02 New
    • 3
    • 0
    +3
    Rather, this empire would disappear and not drag anyone away.
  10. putnik 30 October 2015 13: 06 New
    • 1
    • 0
    +1
    Now they have little planet. Further the world government and stellar expansion. So probably the development of "Amer" is seen. Only Hollywood realized this scenario.
  11. tommy717 30 October 2015 13: 33 New
    • 3
    • 0
    +3
    So about what kind of economy Obama spoke torn to shreds. He just got lost in space and time.