The Stock Market Crash Of 1929 And The Great Depression

The act of trading financial assets goes back to the 1500s. What is the stock market? The stock market is an economic system based on the needs of the consumer and the buyer. Stocks are shares or a fraction of a company that can be bought or sold over a public or private exchange. Stocks are qualified as financial assets, a financial asset is a tangible asset that derives value because of a contractual claim of what it represents. (Investopedia) If investing in the stock market, you should be cautious, stocks can be a gamble, you are investing in the possible success and market growth of a company, because of this, if a stock or company grows exponentially, you have the opportunity to make a lot of money, however you’re also taking the risk

Sixteen million stocks were traded in a single day. The Stock Market crash was due to many variables creating instability in the economy, these factors include low wages, the rapid increase of debt, struggling agriculture and production, and loans that could not be liquidated or resolved (Stock Market Crash of 1929). It would not be until World War Two that the American economy recovered. In the 1929 crash, the sudden drop in stock prices caused people to seek selling their stocks, however the lack of buyers caused the prices to exponentially drop. In 1919 the United States emerged from World War One as the economic leader of the world, european countries were drained financially as their money and production was exhausted on the war. Due to the increase of wealth in the American economy, luxury became necessity, this lead to a large boom in consumerism which in turn lead to the innovation of consumer credit, credit that allowed for buying expensive items immediately and allowing people to pay it back later. This new type of financial structure was left unregulated and people began to buy things like stocks with credit, this caused addition issues financially as if a stock failed, the people investing with credit would have no money from the stock to pay the debt, when this happened over a

The quality of the economy is a major variable in success in the stock market. The economy is the collective wealth, spending, and production of a population. The economy is a massive cycle of transactions, trades, credit, and debt driven by transactions and spending. The economy is broken down into a variety of markets, these markets are created through supply and demand of a good or service, these goods or services can be purchased through physical money or credit, credit is issued by banks at a fixed or changing interest rate, this interest rate is decided by the central bank. Credit becomes debt, debt must be payed back and the interest rate determines how much debt will be amassed over