Throughout Grant’s first chapter, Gloomy Sewell, Grant recognizes the consequences of bear and bull markets, each having pros and cons in the United States economy. Acco...
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...s. The Reserve banks produced credit, and commercial banks continued as well, thus “the public availed itself of the opportunity to borrow” (153).
According to Grant, “the war advanced the democratization of credit” through wartime finances, Liberty bonds, and the continuing expansion of credit. Credit and inflation is on the way to becoming a dangerous habit for the banking system, ultimately leading to uncontrollable inflationary consequences. Grant shows the obsession with this expanding as the public bought bonds in order to help finance foreign countries as well as our own. Though many bonds failed, the government arrogantly continued to create more easy money. Unfortunately, the public were confident in the democratization and expansion of credit; they were unaware of the effects their casual actions would have on the future of the country’s banking system.
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