What factors played into the 1929 newspaper headlines and the

What factors played into the 1929 newspaper headlines and the Great Depression?

The Great Depression of the 1930s was global and devastating. With the current global economic conditions, it's worth taking a look at the 1929 stock market crash, 1929 newspaper headlines and the behind-the-scenes moves that brought about this disastrous economic period.

Anyone who has studied the stock markets understands that the up and down moves are cyclical in nature. This is a basic precept of the Dow Theory. When economic times are good, a savvy investor can make some nice profits. However, there are other external cyclic events that can be of considerable impact to the markets and which many people fail to notice. This is not surprising, as such events seem unrelated. For example, a catastrophic natural event, such as Katrina in 2005, or the ongoing wars in Iraq and Afghanistan may affect specific stocks, but it's hard to capture the trickle down effects, which may take years to surface.

It's said that history repeats itself and this is certainly true in the financial markets. To give some perspective on the 1929 newspaper headlines and the Great Depression which followed, it becomes at least an interesting exercise to see what forces were in play then and now and see how they match up.

During the prosperous 1920s, average people, urged on by the seemingly fabulous profits to be made in the stock market, were buying shares and making money. Being an investor became all the buzz. It got to the point where hotel bellboys were giving tips to wealthy guests on 'the' stock to buy and receiving a nice tip for the information. Everyone was investing.

Behind the scenes, the Federal Reserve Bank was printing money hand over fist, flooding the market with currency, printed and loaned to the government at interest. Currency was no longer backed by gold, as it had been previously. The bankers were making their money directly from the interest, which was ultimately paid by the taxpayers.

During this period, around 1924-1925, banks began failing. Account holders rushed to get their money out of the bank. The Federal Reserve had a solution. Print more money. Stabilize the markets and get the small investor feeling confident again. People like J.P. Morgan and David Rockefeller, who benefited to the tune of what would be billions of dollars in today's currency, didn't want the small investors to quit investing. It became necessary to take steps to keep this frenzy of investing by average people going, if they were to continue reaping huge payouts to themselves, as well as keeping the bankers in robust sums of money garnered by the interest bearing currency. They succeeded.

In March of 1929 newspaper headlines began to hint that things were not quite as rosy as people had been led to believe. However, for every piece of bad news, there was an upbeat message to counter the bad news. Here's a good example of a 1929 newspaper headline story, excerpted from the New York Herald Tribune, and which ran on March 28, 1929.

Headline: 'Stocks Soar As Bank Aid Ends Fear of Money Panic'. The story read, in part, The stock market strode out from under the shadow of a panic in call money ... revived in all its old strength yesterday. Assured that the New York banks were ready ... to prevent a money crisis, the public and the professional trader set out to repair the damage done to prices on Monday and the major part of Tuesday.

Stocks in the aggregate, though bucking a 15 per cent rate for loans, enjoyed the greatest advance ... in a single day in the last two years. Not even the surging bull markets of ... 1928 saw such a day of heavy buying.

This sort of reportage was typical of the 1929 newspaper headlines, right up to and following the market crash in October. Investors were told that this was just a 'correction' and the market would remain prosperous through at least 1930.

The rest is history. The bottom line is that bankers and politicians, to a large extent, always profit from crises and war. Since they control the issuance of money, it's always a simple matter to fund such ventures, lining their pockets amply along the way.

From the days of the 1929 newspaper headlines to today, money, foreign and domestic policies, war and newspaper reporting are all still in the control of the same groups of people.

The small investor always becomes a victim when they start moving the world's economy. There's much more to this than meets the eye. It's worth a thought or two. We might well see a repeat of the 1929 newspaper headlines in the future, unless we start paying attention to the smoke and mirrors before us.

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