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Position:Home>History> Did the dollars devaluation during the great depression ever lead to bread costiQuestion: Did the dollars devaluation during the great depression ever lead to bread costing a wheelbarrow full of cash!? i know the hyper-inflation in germany led to bread costing millions of reichsmarks, but my friend and i argued about that also being the case in the USA!. i told her that didnt happen, and im pretty sure, but does anyone know!? if it had happened here, the dollar would most likely have been replaced!.Www@QuestionHome@Com
Best Answer - Chosen by Asker: Bread was not expensive, but if you didn't have any money it may as well have been a million!. People used to stand on a streetcorner selling pencils for a penny and apples for a penny!. But only the people who had saved money in a coffee can in their backyard could afford to buy them!. Everyone who invested in the stockmarket went bankrupt!. Banks closed because of lack of money when everyone started running to take their money out!. People had no money to buy things so jobs were eliminated!. Finally when they started the Public Works Administration and others like it, they created jobs and people started getting back on their feet!. Lots of people worked for one dollar a day and were grateful for it!. Everything cost less then so it wasn't as bad when people got back to work!.Www@QuestionHome@Com During the Depression, DEFLATION was the problem!. Deflation is considered a problem in a modern economy because of the potential of a deflationary spiral and its association with the Great Depression, although not all episodes of deflation correspond to periods of poor economic growth historically!. The deflation of the Great Depression, as in 1836, did not begin because of any sudden rise or surplus in output!. It occurred because there was an enormous contraction of credit (money), bankruptcies creating an environment where cash was in frantic demand, and the Federal Reserve did not adequately accommodate that demand, so banks toppled one-by-one (because they were unable to meet the sudden demand for cash— see Fractional-reserve banking)!. From the standpoint of the Fisher equation (see above), there was a concommitant drop both in money supply (credit) and the velocity of money which was so profound that price deflation took hold despite the increases in money supply spurred by the Federal Reserve!.Www@QuestionHome@Com There is a difference between inflation and depression!. What happened in Germany (and other countries) was inflation!. Goods cost thousands of times what they had a year earlier and the value of money plummetted!. In the Depression, the value of money did not change - what changed was the employment situation!. There were hundreds of thousands of unemployed people, who had no jobs, no money, they lost their homes through foreclosures and they went bankrupt!. But during the depression years, if you had any money, you were in good shape!. A loaf of bread or a quart of milk cost five cents!. That's the exact opposite of what happened in Germany, where people still had jobs but because of inflation, they couldn't make enough money to buy even the bare necessities of life!. In comparison, a loaf of bread or a quart of milk would cost $500!. So the two conditions were exactly opposite and the USdid not have inflation, but was subject to the Great DepressionWww@QuestionHome@Com It was the exact opposite!. My father told me stories as a kid of going to the movies, buying ice cream, and more on a quarter!. The problem, that quarter was the hourly rate for a minimum wage job in 1939!. And nobody had a job!Www@QuestionHome@Com No in fact it was very cheap its just noone had any money or a job If it was 5cents a loaf and you only had 3 cents That was the problemWww@QuestionHome@Com No, it never got that bad in the U!.S!.A!.Www@QuestionHome@Com |