Comparing the 1929 Market Crash and the Current Position in the Stock Market

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Comparing the 1929 Market Crash and the Current Position in the Stock Market During the 1920's, the North American economy was roaring, but this decade would eventually be put to a stop. In October of 1929, the stock market began its steepest decline to this date in history. Many stock market traders and economists believe and pray that it was a one-shot episode never to be repeated. On the other hand, many financial analysts and other economists believe that the current stock markets are in place to repeat the calamitous errors of the 1920's. In this paper, I will analyze the causes of the crash and discuss the possibilities of it re-occurring. In 1914, World War I began. The United States intended on keeping out of the war, but by 1917, it was no longer just their exports involved, but their soldiers too. This struggle was financed by highly inflationary means and even though the U.S. involvement was limited in time, the postwar economy had to adjust to the lack of heavy military payouts. In 1919, after the armed forces were almost completely discharged, business activity took a sharp down fall. However, a postwar boom allowed for a quick rise in business activity that lasted about a year, taking us into the roaring 20's. After the postwar inflation came a recession where business was bad, during the second half of 1920. The next year showed a drop in wholesale prices by a third, unemployment rose to nearly five million, industrial outputs dropped by a quarter, businesses were pushed to bankruptcy, and, within some time, hundreds of thousands of farmers were forced off their lands by falling farm prices. Produce such as wheat and wool fell in price by more than a half. Industry eventually recovered, except for farmers, ... ... middle of paper ... ... of owning them, but because we want to obtain profits from our original stock prices. Right now, it is almost impossible for people to see how strong the international commodity markets are. Our parents and cousins and friends, everyone's ears are pinned to what goes on in the market every day of their lives. We need to start teaching more about stock market trading, and with this new expansion of knowledge, we will allow for the market to grow stronger and stronger, but at a steady pace. If the world, consisting of the consciences of over six billion people wants the market to grow, then the market will grow. With international interest and knowledge we can eliminate fraud and stock pooling to raise stock prices. The markets will be more honest, and they will grow at a rate that we need them to, in order to continue with our exceptional economic growth rate.

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