The spectre of the 1930s financial crisis that culminated in the rise of Adolf Hitler’s Nazi party and the Second World War is stalking Europe.
In May 1931, Creditanstalt, founded in Vienna by the Rothschild banking dynasty and the biggest lender in what remained of the Habsburg Empire, suffered a run. Its collapse after a merger with an insolvent rival sparked a crisis that left Germany and central Europe strewn with failed banks, caused defaults in Europe and Latin America, knocked the pound off the gold standard, and forced the New York Federal Reserve by October to raise its discount rate by two percentage points.Sponsored Ads
“The biggest economic catastrophe of the last century has been, of course, the big crisis after 1929,” Ewald Nowotny, governor of the Austrian central bank, said at a conference this week in Vienna. “I truly can say that when we had the big crisis of 2007 and 2008, it was in the back of the mind of everybody, all of us, every central banker, that we must avoid the mistakes of the 1930s.”
The mistakes of the 1930s were not really the mistakes of the 1930s. They were the mistakes in the many decades leading up to the 1930s. By the time the 1930s arrived, then it was already too late.