The worst economic crisis of the 20th century (Great Depression)

    Hello, This article is a continuation of an article that aired in our previous Inspection History article. For those who like historical topics, I encourage you to explore history for fun, interesting, and of course historical discussions that deepen your understanding.

The worst economic crisis of the 20th century (Great Depression)

    The first part of the article described the history of America's very rapid economic development in the 1920s. Economic, cultural and technological development made America the most advanced country in the world for the first time, but eventually all this economic progress collapsed in her 1929, and her 20s called the Great Depression. It has become the worst economic crisis of the century.

    It is here that such rapid industrial growth spawned many new cultures and how entertainment industries such as Hollywood, jazz, and boxing developed in America, until they were finally 180° destroyed during the economic depression. I will explain how the possibility arose. The root of the problem turned out to be the new habit of borrowing money from banks. Debt became the new way of life for many in 1920s America. Debt was not to finance the business, but to meet the standards of a luxurious lifestyle. Even bonds have been used to invest in the stock market.

    After years of skyrocketing American stocks until prices far exceeded the intrinsic value of the company, imagine that the American stock market index rose more than 500% from 1921 to 1929. please look. Even American banks use their customers' money to skyrocket their stock prices to such an extent that they ultimately destroy the intrinsic value of the company in terms of both assets and earnings.

    This led to the so-called "bubble stocks", a condition in which the share price was too high compared to the company's fair value, and eventually some investors realized this and started selling their shares in bulk. The stock price on the American Stock Exchange on October 24, 1929 falls 4-5 days later, more precisely he on Monday and Tuesday, October 28-29. October 1929, known as Black Thursday, caused a great deal of panic in the financial history of the day. The US stock market fell -12% two days later and was rocked again by an even worse drop in stock prices than before. The stock market crashes on Black Monday and Black Tuesday in New York marked the beginning of a signal of economic decline in the United States, setting off knock-on effects for the next decade in every corner of American commerce and business, and even Europe.

    Imagine that people who borrowed money to buy stocks on Wall Street went bankrupt because they owed their banks so much at the same time as the stock market crashed. In addition, there are too many banks that invest the majority of their clients' money in Wall Street stocks. Not to mention the large number of bank borrowers with poor credit ratings who were unable to repay their bank loans. This caused many banks to eventually close and go bankrupt, causing great panic in society. You can imagine when many financial institutions went bankrupt. As a result, many people have been unable to withdraw their funds. Of course, this had a major impact on large and medium-sized deals, and eventually American small businesses experienced a recession so severe that it caused deflation and recession. That's the highest level in history, with up to 25% expecting one in four of her working-age Americans to be unemployed.

    There is no more reason to open a store just because you want to. it's pointless. You will definitely lose money as the price of the product will continue to be squeezed until the price drops very low. Deflation. And the producers suffered so great losses that they had no reason to work because the selling prices of basic necessities were so low. All these farmers and producers took their crops and the rest were either destroyed or distributed intact. Due to the costs of harvesting and distribution, transportation costs were much more expensive than the selling price of the crops.As a result, famine ravaged urban areas as food sources continued to be scarce.

    History facts that the Great Depression became the most important financial catastrophe withinside the twentieth century and possibly even the worst in human history. hit America as the most important commercial united states of america withinside the international in addition to the united states of america maximum laid low with it however the financial melancholy in America additionally finally unfold to the European continent thinking about how huge the impact of American enterprise is that is related in global alternate with European international locations now no longer to say there may be an schedule for compensation debt associated with the quit end result of globalwide battle 1 that is intertwined among international locations in Europe wherein the German nation has to pay the prices of getting better from the battle of England and France the trouble is that Germany could be very depending on alternate members of the family with agencies in America erica in order that the industries in America collapsed Germany misplaced its commercial deliver as a end result it unfold to stagnant nation money owed in Europe the financial melancholy lasted for years, till 1932 Franklin D Roosevelt a Junior Governor gained the presidential election after his humans had been disillusioned with President Hover who became taken into consideration a failure in coping with The Great Depression, particularly due to the fact President Hover imposed a tax fee coverage which sincerely exacerbated the financial disaster on the arms of President Roosevelt, America started to enhance its financial system via way of means of launching the development of 30,000 authorities tasks really well worth three.three billion greenbacks to take in hard work even as lowering deflation.

    Construction of bridges, toll roads, schools, airports, hospitals, dams, etc. In historical records, Roosevelt's project to mitigate the effects of the Great Depression was called the New Deal. So here are some important guidelines for the first New Deal. The government insures the savings of all American banks through the FDIC or the Federal Deposit Insurance Corporation. This will increase people's confidence in American banks, reinvigorate lending and investment, and secondly, suspend the gold standard for dollar printing. The gold standard that has been applied so far is believed to be an obstacle to economic recovery due to the limited amount of gold. Eventually, this policy was imitated by several other countries. In 1935, the Social Security, which provides pension funds to virtually all U.S. citizens, was introduced as an economic incentive for those who were no longer productive to continue consuming more and participating in the upturn of the economy. . In 1935 there was a work called the Wagner Act. Its content was, among other things, a guarantee of the right of association of the employees. This reform was followed by further rules and laws to ensure the safety and well-being of employees. minimum wage guarantees, occupational health and safety regulations, etc.

    In the end, it felt like all these programs were enough to slowly improve the economy, but the reality was that the U.S. government, which was running a deficit, had to pay very large sums for all these programs. From 1933 to 1936, the budget deficit was very large, minus 4.7% of GDP. The government says there were budget cuts for projects built to revitalize the economy during the Great Depression. It looks like it happened early. It turns out that the economic depression has returned to America.

    The last four years have not been enough to pull America out of the economic crisis completely. So how can America get out of this very deep economic crisis? If so, check out our Inspect Story article. Many interesting things For those who have comments or questions about the global economic crisis, content on excitingly discussed historical topics can be posted directly in the comments section.See you in the next article. We're not done talking about money. 

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