Stock Market Crash of 1929
The stock market crash of 1929 and the subsequent Great Depression cost Fisher much of his personal wealth and academic reputation. He famously predicted, three days before the crash, "Stock prices have reached what looks like a permanently high plateau." Irving Fisher stated on October 21 that the market was "only shaking out of the lunatic fringe" and went on to explain why he felt the prices still had not caught up with their real value and should go much higher. On Wednesday, October 23, he announced in a banker’s meeting "security values in most instances were not inflated." For months after the Crash, he continued to assure investors that a recovery was just around the corner. Once the Great Depression was in full force, he did warn that the ongoing drastic deflation was the cause of the disastrous cascading insolvencies then plaguing the American economy because deflation increased the real value of debts fixed in dollar terms. Fisher was so discredited by his 1929 pronouncements and by the failure of a firm he had started that few people took notice of his "debt-deflation" analysis of the Depression. People instead eagerly turned to the ideas of Keynes. Fisher's debt-deflation scenario has since seen a revival since the 1980s.
Read more about this topic: Irving Fisher
Famous quotes containing the words stock, market and/or crash:
“I consider that a man’s brain originally is like a little empty attic, and you have to stock it with such furniture as you choose.”
—Sir Arthur Conan Doyle (1859–1930)
“Writing ought either to be the manufacture of stories for which there is a market demand—a business as safe and commendable as making soap or breakfast foods—or it should be an art, which is always a search for something for which there is no market demand, something new and untried, where the values are intrinsic and have nothing to do with standardized values.”
—Willa Cather (1876–1947)
“At the crash of economic collapse of which the rumblings can already be heard, the sleeping soldiers of the proletariat will awake as at the fanfare of the Last Judgment and the corpses of the victims of the struggle will arise and demand an accounting from those who are loaded down with curses.”
—Karl Liebknecht (1871–1919)