Talk:Great Commodities Depression
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can this be called an depression ?
http://www.safehaven.com/images/griess/2772_a.gif
look at this picture.... The prices soared and then adjusted, right ? no depression, imho. —Preceding unsigned comment added by 80.131.117.233 (talk • contribs) 17:54, 19 October 2005
What happened in the Great Depression of 1929 ?? Stock prices soared and then adjusted, right ? The peak 1929 price was not eclipsed for more than 20 years. Solow is completely correct to call it a depression, which is a decline in price that lasts a generation, imho. SystemBuilder 04:47, 22 June 2006 (UTC)
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- It's a depression if the marketplace is contracting. Both price deflation and output contraction should be present, to truly define a depression. We can['t judge from a single price chart whether commodities have truly depressed. The length of time of the price deflation (a year, a generation) isn't relevant - that's just the difference between a technical depression (common noun) and a "Great Depression" (proper noun). Now: Has anyone read Solow;s work? How did he, himself, define "depression" and justify its applicability in the commodities markets? How do others judge the literal truth of the depression label? Does it even make sense to call a particular sector "depressed" when the whole economy is not? For example: Is there a depression in the "cassette tape sector", or, is there actually no depression when one sees that they have been made redundant by digital discs? 76.247.45.98 00:00, 20 September 2007 (UTC)
What were the reasons for the depression? —Preceding unsigned comment added by 87.110.141.103 (talk) 11:24, 17 December 2007 (UTC)
- One could argue that the "reasons" were a previous run up in the price of gold and other commodities due to inflation fears. A 22% interest rate fixed the inflation fears as no one truly thought the US government would go under and transferred much of their wealth from commodities into a guaranteed interest rate. Such a "depression" was simply the result of a correction and the continued decline in price was simply the result of the strengthening dollar.
- Others might argue that an emphasis on such commodities was displaced over time. Many people moved closer to their work as a result of the high price of oil, people ate less or more sensibly, etc. I think this is a much weaker argument, but some of it could be relevant. The fact is, the US dollar became stronger, so the price didn't need to increase in order for these commodities to maintain demand.12.208.119.247 (talk)
