This caused a violent depression in the
United States and some other countries, with the collapse of
financial markets and the contraction of production and employment.
In 1929, Norman engineered a collapse by puncturing the bubble."
The crash was, in large part, a reaction to a sharp reversal,
starting in 1928, of the reflationary, "cheap money", policies of
the Fed intended, as Adolph Miller of the Fed's Board of Governors
told a Senate committee, "to bring down money rates, the call rate
among them, because of the international importance the call rate
had come to acquire. The purpose was to start an outflow of gold -
to reverse the previous inflow of gold into this country (back to
Britain)." But the Fed had already lost control of the speculative
rush.
The crash of 1929 was not without its Enrons and World.com's.
Clarence Hatry and his associates admitted to forging the accounts
of their investment group to show a fake net worth of $24 million
British pounds - rather than the true picture of 19 billion in
liabilities. This led to forced liquidation of Wall Street positions
by harried British financiers.
The collapse of Middle West Utilities, run by the energy tycoon,
Samuel Insull, exposed a web of offshore holding companies whose
only purpose was to hide losses and disguise leverage.
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