What was the result?

Question

The Federal Reserve lowered interest rates after a time, but in 1930 and 1931, when the AMerican economy had already taken a downturn, more bank runs occured in many countries, and againn gold flowed out of the United States. To keep gold in the United States, the Federal Banks again raised interest rates. What was the result?

Answer 1

Ahh crap...If i kept up with my AP US history nightly reading I would be able to tell you, we're right at the FDR presidency.

Maybe ill try to find out tomorrow and edit my answer

Answer 2

Interest rates going up squeezed out liquidity and worsened the depression. This is a fairly widespread view and seems to make sense. However, the central bankers of the time were not completely crazy (just wrong), since there was (and probably is) some thought that, if depressions are a "natural" phenomenon, the faster and deeper the depresion, the quicker it will be over. There was reason behind profuse bloodletting to cure some diseases in the 18th century. Unfortunately, though diseases may have been cured, the patient often died. This is why bloodletting (in medicine) was dropped as a bad idea and is not really popular in economic policy.

Answer 3

The result was ten more years of the artificial Depression, the crisis caused by keeping the borrowing rate at 3%, handing money to any incompetent calling himself a CEO and issuing stock and letting people pay a "margin rate" of 10 cents for stocks on the dollar.
We never came financially out of the Depression; we only spent our way out of it arming for World War II. The money then went to government-connected contractors, corporations and the like. The only true recovery came with the Democrats, under John Kennedy. Because their legislation among other things undid the three things I mentioned. They tried, sometimes the wrong way, to assure that union members got better pay, they raised the margin rate to 50% and the borrowing rate was kept at a sensible level--as Alan Greenspan later tried to keep it also. But once Nixon, and Reagan were elected, the US citizen lost any gains that had been made. The run-up to the Depression began in the 20s when the Republicans used the federal reserve--expected by naive Democrats to be used stabilize availability of currency to the country's citizens as a whole--to try to create an artificial gold mine handed over exclusively to their elite class of cronies, bankers, insurance companies, corporate officers, lobbyists and overpaid government bureaucrats at every level.
My father made 4,000 in 1941, working for the post office; now a mailman makes 28,000. But to live as well as he did back then, you'd have to make 96,000. And he belonged to an elite group--a government-connected group--back then. Imagine how much worse the rest of us are doing. So when the Depression was caused and panic set in, nothing was really done that made it better once interest rate were raised; no cure was possible by doing that.