A recent column on Investing.com discusses former Fed Chair Ben Bernanke's recent comments that the 2008 financial crisis could have been worse than the Depression. Writes author Brian Gilmartin: "I think former Fed Chair Bernanke was right in concluding that 2008′s recession, if left to run its course, would have been a far greater calamity for the US economy than the Great Depression, but for different reasons: 1) The money markets and the commercial-paper market was at real risk of failure, which means that S&P 500 companies couldn't have rolled short-term, high quality CP; 2.) Far more Americans through 401(k)'s and pensions had exposure to the stock and bond markets than Americans had in the late 1920′s and early 1930′s;" He incorrectly comments, "The Reserve Fund was, at that time (I believe) in 2008, one of the world's largest money-market funds [which is true] and if the Reserve Fund had "broken the buck" [sic], which means that if the Reserve Fund's NAV had moved below $1 per share, it could have resulted in a run on money markets that would have made the bank run and the Bailey Building & Loan run ("It's A Wonderful Life") look like a day in the park. (The aftermath of what happened with the Reserve Fund in 2008 is that today, the SEC is contemplating and is close to letting money market fund NAV's (net asset values) float. The thought is that the $1 money market price creates a "moral hazard" and what I told a client recently is that what retail investors will likely wind up with is whole array of "ultra-short" bond funds as money market funds, which do fluctuate minimally in price.)," He continues: "The Great Mistake in the 1930′s by the Federal Reserve is that it actually withdrew liquidity sometime in 1935–1936, which resulted in another downturn in the US economy in the late 1930′s just prior to WW II. In other words, Fed policy errors actually exacerbated the Great Depression, rather than shortened it. Both Janet Yellen (I'm sure), just like Ben Bernanke are/were both aware of the Fed's policy mistakes and are obviously loathe to make the same mistake." See also, the WSJ's "Bernanke: 2008 Meltdown Was Worse Than Great Depression".

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