Reply #11: Actually, thats not entirely true...

[TampaAnimus2010]

What caused the great depression was the bursting of a bubble caused by the exact same thing that caused todays issues, over-stimulation of the economy via inflation. In out case the vast majority of the inflation was channeled into the housing industry via lower interest rates and easing of home loan restrictions resulting in overproduction in that sector.

Over the entire period of the 8 year boom previous to the great depression, we find that the money supply increased by $28.0 billion, a 61.8 percent increase over the eight-year period. This is an average annual increase of 7.7 percent, a very sizable degree of inflation. The major increases took place in 1922-1923, late 1924, late 1925, and late 1927. The abrupt leveling off occurred precisely when we would expect—in the first half of 1929, when bank deposits declined and the total money supply remained almost constant.

For a really entertaining video on the subject, check this out.

http://www.youtube.com/watch?v=d0nERTFo-Sk