On November 5, 1929, President Herbert Hoover held a news conference about the financial panic that culminated with “Black Tuesday” and initiated America’s second Great Depression. He criticized the Federal Reserve for being unable to stop the inflation for which it was responsible.
We have had a period of overspeculation that has been extremely widespread, one of those waves of speculation that are more or less uncontrollable, as evidenced by the efforts of the Federal Reserve Board.
Explaining prior warnings he had given about the Fed’s credit expansion while serving as Secretary of Commerce, Hoover later wrote, “Behind these alarms was my knowledge that the Federal Reserve Board had deliberately created credit inflation.”
On the eighty-first anniversary of Hoover’s November comment, The Wall Street Journal reports that the Fed’s plan for a second round of quantitative easing (QE2) has created an inflation scare in emerging-market nations.
The weaker dollar, along with the prospect of liquidity-fueled growth around the world, helped turbo-charge commodity prices. Crude-oil prices on the New York Mercantile Exchange jumped 2.1%, their highest level since early April. Gold prices surged 3.4% to a record of $1,382.70 per ounce in Comex trading. And silver prices rose 6.6%, the biggest one-day dollar gain for the metal since December 1980.
In order to effect safety and happiness, Representative John Boehner and Senator Mitch McConnell, leading the United States Congress, should judge it as necessary and expedient to bring an immediate end to Barack Obama’s inflationary monetary policy, thus eliminating the possibility of Americans suffering from the misery of high unemployment and runaway inflation characteristic of stagflation.
Herbert Hoover, The Memoirs of Herbert Hoover (New York: MacMillan, 1952).
Mark Gongloff, “Dow Hits Pre-Crisis Level – Central Bank’s Spending Binge Stokes Global Rally,” The Wall Street Journal, November 5, 2010, A1.
Barack Obama, “Remarks by the President in a Discussion on the Economy in Richmond, Virginia,” September 29, 2010.