The Great Depression, explained for dummies. How did it start? The causes and consequences of the Great Depression.summary wtf
1918: THE BEGINNING.
After WWI, the U.S economy expanded fast. Why? Troops were back, the war delayed projects that were springing up again and more women entered the workforce. The point is that people had money and they were like…
WHERE DO WE INVEST OUR MONEY TO MAKE MORE MONEY?
The answer was the stock market, centered at the New York Stock Exchange on Wall Street. Every one, from millionaires to cooks were investing. It became a popular practice.
Stocks were rising so fast, companies were having a hard time keeping up and justifying their stock price. In other words, as many people were buying shares, share prices rose too much, leaving companies overvalued.
Although company stocks were rising, people weren’t actually buying as many things, which slowed production. All of this led to….
THE GREAT DEPRESSION (1929-39).
On October 24, 1929, as nervous investors began selling overpriced shares en masse, the stock market crash that some had feared happened at last. A record 12.9 million shares were traded that day, known as “Black Thursday.”
- Shares are now worthless, people lost their life savings, and people who had loans from banks couldn’t pay them back.
- As consumer confidence vanished in the wake of the stock market crash, the downturn in spending and investment led factories and other businesses to slow down production and begin firing their workers.
- It is the worst economic downturn in the history of the world. The Great Depression, explained for dummies.
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