Buillon

I'm much of the way through Lords of Finance and Liaquat Ahamed's narrative is as follows:

1. 1927, Britain is on the gold standard and suffering. The Fed cuts rates to help out the pound and sets off a stock bubble (that leads to the crash 2 years later.)

2. Commodity prices fall and there's a shortage of gold.

3. In the scramble for gold, central banks raise interest rates.

4. There's a world wide slowdown with the U.S. stock market entering a speculative bubble.  It crashes in 1929 and causes a further slowdown. Unemployment rises.

5. The Fed acts a little bit, but refuses to do more fearing another speculative bubble.

6. "Far more damaging than the effect of the protectionist Smoot-Hawley Act was the collapse of capital flows. Capital in search of security was flowing into those countries with already large gold reserves - such as the U.S. and France - and out of countries with only modest reserves - such as Britain and Germany."

7. U.S. banks started going under as the Federal Reserve refused to prop up insolvent banks, which undermined public confidence and caused the credit system to freeze up.