The great depression in a nutshell

There is no 'In a nutshell'

like a lot of historical events, this was rather a culmination of lots of little things. I'm 23 and I still don't quite understand it. Maybe I'm just retarded.

People bought worthless shit thinking it would become more valuable. One day everyone kind of realised it actually was worthless. On that day the market value of their assets went from "a lot" to "nothing".

>>2561798
Businessmen.

Kill the value of things, buy up all real estate, resell them 1000000% mark up after economy stabalizes.

From what i understand its cause was from distortions in the global economy stemming from WW1 expenditures & the Treaty of Versailles made worse by an inability for the global community to formulate a cooperative response (see: Hawley-Smoot Tariffs & the London Economic Conference)

>>2561798
There was a major bubble, the stock market crashed. After it climbed up a little bit, it crashed again. The stock market guys lost a lot of money, and tried to get all their money out of the bank in order to survive. Ordinary citizens followed, because they were afraid they wouldn't get their money back. "Bank runs" you should look them up.
With all these bank runs, the banks couldn't pay their customers back, so the ordinary citizens lost money as well.
The government refused to lend banks money, (mistake to some, a good choice to others) so America's financial infrastructure collapsed. Thus, all lending halted, crushing the economy, because nobody was willing to take out loans. With businesses shutting down, families became poor, and the Great Depression started.
This may not be entirely accurate for some, but it's a very quick overview.

>>2561948
The Great Depression was a global economic downturn, not an American episode. You won't find the cause looking for it in the American stock market in 1929.

>>2561964
True. I was just looked at the American side of things.
If we take an international look, what was the beginning of the Great Depression?

>>2561980
see >>2561920

>>2561986
Thanks.

Watch it ->

https://youtu.be/K8eLfI5YlMM

>>2561798
After WW2, Germany had a large reparations bill that it was going to be unable to pay. This in turn meant that France and England were unable to pay off their massive debts to the US. To rectify this, US banks began loaning to German firms, stimulating the German economy and providing the money for them to pay the French and the English, who could then pay the US. So by 1929, the economies of all these countries, then the largest in the world, were all locked in to the same cycle of payments. So when the US stock market bubble burst, US banks stopped loaning to Germany, the Germans stopped paying reparations, and the French and Germans stopped paying the US, crashing all of their economies. Exacerbating the situation, countries worldwide began to play a big game of 'beggar thy neighbor,' using tariffs to heftily tax imports, and crashing more economies in the process. Latin America, for example, had exported heavily to the US, but was cut off from such trade by the Hawley-Smoot tariff, destroying their economies.

>>2562076
>After WW2
oh jeez how embarrassing

>>2562095
Christ, that's a typo that will haunt me for the rest of my days.

>>2561798
it was made intentionally in order to plunge europe into a civil war

>>2562076
Germany stopped paying reparations well before 1929.

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>panic of 1907 happens and JP Morgan bails out failed banks
>politicians make JP Morgan look like the bad guy and push for a central bank
>federal reserve founded for the express purpose of preventing runs on the banks
>banks no longer fear runs and disregard the cautious attitude they had in the past
>middle classes with little experience in finance can get loans and pour it into the stock market
>at the same time new technology like electricity and the automobile becomes widespread fueling speculation
>bubble bursts
>run on banks happen
>fed does nothing

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The end of WW1 saw the United States overtake Great Britain as the worldwide economic hegemon, Wall Street usurping the London Stock Exchange as the financial capital of the world. All economic eyes set sight on America over Europe. The gold standard, which Britain had so rigorously enforced across the globe with its Navy and its imperialism was beginning to erode, as too were its dreams of a globalistic trade empire that kept the peace through controlling the waves. The US became the world's leading creditor. It was already the world's leading industrial power before the war.

But the United States was not all that prepared to deal with the burden of being the trade hub of the world yet. It was one foot in isolationism, one foot in the outside world. This led to uncertainties and variability in the market, first leading to the sharp crash just following WW1 and ten years later to the Great Depression.

>>2562556
>fed does nothing

Epic meme bro.

>>2562556
>middle classes with little experience in finance can get loans and pour it into the stock
Less than 5% of Americans had money in the stockmarket in 1929. The Wall Street Crash essentially had no impact on your average American, and the stock market recovered most of its lost value in the weeks after the Crash anyway.

The Crash was not a cause of the Great Depression, it's simply a convenient narrative starting point to try and contextualize the depression.

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>>2561798