The Great Depression
The standard bearer for financial crashes is and will always be the devastating crash of 1929 and the resulting Great Depression. This event has earned its place as the worst financial crisis in history not just because of the crash itself, but the longterm effects it had on American society. Many factors can be attributed to this crash but the false belief that the stock market will continue to rise stands head and shoulders above the rest.
The post war 20’s was a time of wealth and excess brought on by post-war optimism and many rural Americans deciding to try and make their fortune in the cities. Of course, with wealth and excess comes greed and corruption, Wall Street had its fair share of that. The root of the collapse is debated even today but one of the reasons might be ordinary people had become interested in investing in the stock market due to the rapid growth in bank credit and easily acquired loans, coupled with the stocks being vastly overpriced, disaster was inevitable.
The simple rule of ‘what goes up, must come down’ was completely ignored as people believed that their soaring economy would continue to rise and when it did crash, many investors and ordinary people lost their entire savings, while numerous companies and banks went bankrupt.
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