What happened during the great depression ? The Great Depression 5 Minute History Lessons

 What happened during the great depression ? 

In the world of finance we are often 

quick to forget the tragedies of the past yet valuable lessons are to be had by exploring their causes and effects after all in world of ever-changing rules products and services history is the one constant that can guide us through the ambiguity so let's take a five-minute history lesson on today's the year is 1918 and after four years of conflict the first world war is finally over America has emerged as one of the victors and his boat enter a period of economic prosperity and cultural change known as the roaring 20s things start off pretty strongly as the postal economy has seen a boost troops are back from the war delayed projects are springing up again and hey more women are entering the workforce meaning that more people have a salary to spend and companies are looking for a piece of the money pie..

so in 1920 we see our first radio 

advertisement and it seems to be working recent inventions like the vacuum cleaner and the electric washing machine are becoming hot commodities and hey since things are looking pretty good the banks are giving out loans to everybody meaning that even more people can buy the latest and greatest gadgets before you know what everyone's getting the car - Henry Ford's T model to be exact and with it life is becoming a lot easier now you can do the Charleston across town we hope for your evening smoke all of this is making companies very rich then the average American is making good waves themselves in fact people are starting to look for things to do with their newfound wealth by another laundry

machine nah a new car don't need it oh 

wait what about investing yeah that's it after all why be rich when we could be more rich so the stock market becomes a pretty popular practice and with so many people buying investors are finding it very easy to make money on stocks soon enough everyone thinks they're 1920s Warren Buffett and I mean everybody cooks shoeshines taxi-driver so you name it and everyone is trading like a Wall Street tycoon pouring their life savings into whatever security is hot that day in fact there's so much money to be made people are taking out loans to invest even more and banks are probably collecting the interest by the way those same banks are looking to invest more money too and soon enough they begin borrowing money from customer bank accounts to buy stocks but since things are looking up no one's noticing and overall things are going pretty well in America financially anyway and as we experience flapper culture prohibition.

and the rise of jazz music people are 

making good money on the markets by 1929 America stole wealth has doubled and investments are up 218 percent since 1922 in fact stocks are rising so fast companies are having a hard time keeping up and justifying their stock price wait and hold on production actually seems to be slowing down Henry's not making as many team models and people aren't buying as many things it looks like companies may have overestimated their growth and now wages are falling and all that easy tax is dead well people have taken know quite a bit and oh oh interest rates are starting to rise but wait a minute the stock market is still up that doesn't seem right even though the economy is looking worse for wear under the hood investors are more or less ignoring these problems in buying some as if everything were exceptional sure we see a few shake ups and close calls but things are still largely positive and people are still gambling.

on the markets but over time the voice 

of reason is getting louder and investor uncertainty is increasing which brings us to October 24th 1929 Black Thursday as it's called the theorized start of the Great Depression investors have been royally spooked with headlines reading and when markets open they start to sell and I mean so twelve point nine million shares to be exact a new record and that opening bell things fall 11 percent people are selling so much that price tickers can't keep up with the volume so people don't even know what they're selling races and all of this selling is dragging the stock market down erasing large chunks of America's wealth and things are about to get horse while markets recovered later that day come.

black Tuesday it's an outright panic the 

Dow Jones Falls twelve percent and that record we set last Thursday yeah we just broke it again the markets loose forty million dollars in one day some shares are now worthless people have lost their life savings and Americans who borrow to invest are absolutely crushed and so friends here we are the Great Depression the worst economic downturn in the history of the industrialized world the Dow Jones Falls for another three years after this losing ninety percent of its value from its high in 1929 many lose their jobs this company shut down and it's not just investors that are hit remember that many of the bank's poor old well a bunch of it is lost in the markets too and people are only getting back ten cents for every dollar they had in their account banks across the country shut down and unemployment reaches its highest level.

fear of the markets can be when they get 

out of control while demonstrating the destructive potential of speculation and debt laws would later be introduced to safeguard financial institutions and deposits during his time in office Franklin D Roosevelt would introduce the Federal Deposit Insurance Corporation and the Securities Exchange Commission institutions targeted at protecting the wealth of Americans that still exists to this day few are left to remember the hardships of the depression but we'd be foolish to forget the lessons it provided after all fear greed andspeculation are far from dead.