The Great Depression started with the stock market crash in 1929. Stocks were raising and raising then almost overnight the market crashed. People were buying on credit and Banks were lending to everyone. After the crash everyone afraid of losing money withdrew their money. Banks didn't have enough to give back to people. This devastated the banks, most went under. Also durning this time unemployment soared to about 23 percent. Market crashed, banks failed and jobs scarce people become scared and when people are afraid they spend less money further hurting the economy further.
Well this is not too different from today. We are facing a constantly rising stock market that is bound to fall. Jobs are becomeing increasingly scarce. People are spending less. Are we heading to another depression? Well good news another cause of the depression was the dust bowl destroying many farms making food spike. As of now we have a stable food supply here in the US but for how long? Another good advantage is our history. Unlike in the 1930s we can look back and react quicker.
Intelligent stuff Gerlando.
ReplyDeleteVery interesting theory Gerlando. I have never made that parallel before, even though the 1920-30s are my favorite history decade. I also think that the ignorance of the people during that time lead them to have such a Great Depression if you will. Like you stated at the end of your post, if we are in face heading into another depression we can stop it quick enough because of past events. But I don't believe we are, in fact I think we're coming out of a recession due to lowering of gas prices and other goods. Although history does in fact repeat itself for some strange reason, even things the world would rather never see again.
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