Recently, a lot of people compare the tariff policy of Donald Trump and President Herbert Hoover. Why is it so horrible? Because it triggered the Great Depression of 1930s, the greatest recession ever in American history.
In the 2008 Financial Tsunami, the writer also compared that Financial Crisis with the Great Depression of 1930s and quoted the conclusion of historian. The real far factor of World War II is the Great Depression of 1930s. It is not just a depression in the US but spread worldwide. Thus led to the military action of Japan and Germany. The 1930 Great Depression was caused by several factors, one of the major factors was the tariff.
So what’s the difference between 100 years ago and now? Hoover is the only US president that can speak fluent Mandarin, therefore his policies was pro-China and not against China. At that time, China was ruled by Nationalist government which now driven to Taiwan. The Smoot-Hawley Tariff Act in 1930 was passed by the Congress and Hoover has the right to reject or accept. Now nothing is passed by Capitol Hill, everything was decided by King Donald. According to the record of these two and a half months, he can up-date, up-hour, up-minute and up-second it as he likes.
So when harder terms come, people expect Trump would adjust them very soon or several months later, when the condition is unfavorable, they also expect Trump would adjust a bit. This is the major difference between the 1930 Great Depression and nowadays.
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.