Have money to spend and the Great Depression has begun? A large number of debtors cut off supply, money and goods were hollowed out, overcapacity, unemployment rose, fertility rate fell, lipstick effect appeared, and anti-urbanization appeared. I'm not talking about the Great Depression in the United States.
In the decade before the stock market crash of 1929, the U.S. economy experienced a golden period, known as the "tumultuous twenty years." Cars and electric lights began to spread, urbanization accelerated, and consumerism prevailed. Driven by auto stocks, the stock market has risen for seven consecutive years, giving people the illusion that they only rise but do not fall. Therefore, during the low-interest cycle from 1924 to 1927, a large number of shareholders borrowed money to leverage stocks.
However, as the economy weakened, the stock market began to fall. For more than a week from October 21 to 29, 1929, the U.S. stock market was magnified under leverage, and the normal adjustment of the stock market was magnified into a collapse, and this week became the starting point of the Great Depression. After the shareholders burst their positions, one by one the butterfly effect appeared, and the stocks in their hands quickly turned into waste paper. At this time, the Great Depression began and spread across the globe.
After the stock market crash, banks began tightening credit, making it difficult for businesses and individuals to get loans. Global industrial production fell by 30 percent and U.S. industrial production by 40 percent. Global trade fell by about 50 percent during the Great Depression. U.S. exports are down about 60 percent and imports are down about 40 percent. Unemployment peaked at 25 per cent, with large numbers of people unemployed, leading to a decline in consumption and investment. It was not until 1933, when Rothfre took office to implement the New Deal, that the economy began to recover. 1929 developed from a financial crisis to an economic crisis, then to a currency crisis, and finally to the Great Depression.
The Great Depression became the Great Depression because the monetary system at the time was still on the gold standard, which could not repair the economy by printing money quickly when it encountered a shortage of liquidity. So don't try to cause panic by quoting history.
The Great Depression of 1929, the Chutai crisis of 1980, and the subprime mortgage crisis of 2008 are different, which I will cover in detail in a follow-up article.
