Economical Events That Lead Up to the Great Depression

Information: In the 1920s, things were really rocking in the US and somewhat the world. The rapid increase in industrialization was fueling gain in the economy, and technology improvements had the direct economists believing that the up start would continue. During this boom period, wages increased along with consumer spending, and bear prices began to attire as well. Billions of dollars were invested in the stock market as wad began speculating on the rising stock prices and buying on margin. The vast amount of unsecured consumer debt created by this speculation left the stock market essentially off-balance. Many investors, caught up in the look sharp to make a killing, invested their life savings, mortgaged their homes, and cashed in safer investments such as treasury bonds and bank accounts. As the prices keep to rise, some economic analysts began to warn of an impending correction, but the leading pundits largely ignored them. Many banks, eager to increase their profits, began speculating dangerously with their investments as well. Finally, in October 1929, the buying craze began to dwindle, and was followed by an withal wilder selling craze. The Great Depression was the worst economic slump ever in U.S. history, and one, which spread to virtually the total industrialized world.

The sock market crash was the start of an economic downturn. Numerous tribe bought their stocks on margin. They also purchased stock with borrowed money. When at that place was a drop in the stock market, some fear and sold their stocks, for much less then they were originally worth. When people bought their stocks on margin, they only had to pay 10%. The stock became abortive and people went in to debt, because they had no money to the banks. Consequently industries such a farming, mining, textiles, and construction to have financial problems. Therefore businesses were non able to pay their debts, hundreds of banks failed. Many depositors withdrew their money... If you want to get a full essay, order it on our website: Orderessay

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