“Most economists, including Federal Reserve Chairman Ben Bernanke, agree that the primary catalyst for the Great Depression hinged on poor policy-making by the Federal Reserve. The Reserve made the unfortunate decision to reduce the money supply during a time (the summer of 1929) when the nation’s economy was going through a severe recession. In an ill-advised attempt to preserve the worth of the American dollar during the subsequent financial crisis, the Federal Reserve increased rather than decreased the Federal funds rate. This course of action proved disastrous, causing widespread failure of banks. People lost their confidence in financial institutions and ran on the banks, demanding their deposits be returned to them in cash form. The consequences were disastrous and the Great Depression began.

Many people feel that in view of the current situation, America could once again suffer a massive economic disaster on the scale of the Great Depression. This is not surprising when one takes into account the problems that have been plaguing the nation, including market decline, mounting national debt, bank failures, widespread foreclosures and massive unemployment.” 

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