The content of this article comes from the Internet, if it is inconsistent with the actual situation or there is infringement, please contact to delete. This article is only published in today's headlines, please do not move.
At the beginning of the 20th century, the United States experienced a wave of economic prosperity, which was a time of opportunity. The new technological revolution is in full swing, and cars and home appliances have made people's lives easier than ever. However, behind this prosperity, hidden dangers and crises are hidden. This article will take you back in time to the United States in the 2020s and explore the truth of that turbulent era.
First, let's go back to the early 2020s, when the United States was basking in the sunshine of economic prosperity. The continuous emergence of new technologies has opened new doors for productivity gains. The large-scale promotion of bank credit stimulated consumption, the government adopted a policy of allowing the market to develop freely, and the market economy was booming. By the end of the 2020s, the share of industrial production in the United States had reached 48.5%, more than Britain, France and Germany combined at that time. This number certainly gives confidence in America's future.
However, this appearance of prosperity masks some deep-seated problems. Despite the continuous growth of production, the wages of ordinary workers and peasants were not commensurately increased, and wealth was concentrated in the hands of a few. Economic prosperity relies mainly on high yields in investment markets such as stocks and real estate, which turns investors into speculators, and highly leveraged operations keep speculators taking risks. The Dow Jones Industrial Average rose 400% in the 2020s, but at the same time, US GDP rose by only 50%. The rise of this virtual economy has begun to leave the real economy behind.
The few who hold wealth gradually lose interest in investing in the real economy, preferring to put their money into real estate and the stock market. In order to catch up with the pace of development, ordinary people have also joined the wave of stock and house speculation. The booming financial sector has led to fierce competition among banks and an increase in non-performing loans. In order to ensure that companies can repay their debts, the only way to help companies go public and pass on credit risk to the stock market is to help them. This confidence-dependent lending and consumption model, once confidence collapses, will bring about a huge crisis.
As President Coolidge said in the early 2020s, the American people seem to be in the midst of happiness rarely seen in history. However, behind this happiness, there are heavy hidden dangers. On September 18, 1926, Florida was hit by a hurricane that reached speeds of 125 miles per hour, causing massive damage and 415 deaths. Florida's housing market was once booming, but after the hurricane, home prices fell sharply, triggering a crash in the housing market. The event marked the bursting of the U.S. housing bubble, with investors dumping property and land.
Florida's hurricane disaster became the first domino to cause economic collapse. The previously booming real estate market has become a speculator's paradise, but all this has come to naught under the onslaught of the hurricane. Without the support of the housing market, people are left with only one option, and that is to turn to the stock market. They are not used to the loss of wealth and urgently need to recover their losses in the stock market. Stock market indices have soared, but the disconnect from the real economy is becoming increasingly apparent.
The Fed tried to cool the stock market by tightening liquidity, but this did not work, just squeezed out some bubbles, and more bubbles kept popping up. On October 24, 1929, the stock market experienced a devastating crash, a day known as "Black Thursday." The stock market plunged and cost investors dearly, and $30 billion in wealth was wiped out in just two weeks, equivalent to all the spending of the United States in World War I. The collapse of the stock market set off a chain reaction that saw dollar runs, banks failing, factories shutting down, workers losing their jobs, and poverty spreading.
From 1929 to 1933, at least 130,000 businesses and banks collapsed, automobile industry production fell by 95 percent, total industrial output and national income fell by nearly half, and unemployment rose from 2.5 percent in 1929 to 25 percent in 1933. The impact of the economic crisis has ruthlessly destroyed people's lives, leaving many people in despair and social unrest.
The economic crisis also quickly spread to other capitalist countries. In order to safeguard their national interests, countries have adopted protectionist measures, which has further aggravated the recession of the world economy. Germany, as a victim of the First World War, bore a heavy burden of war reparations and was deeply affected by the crisis. In 1932, German industrial output fell by 47%, the number of unemployed reached 8 million, social unrest brought Hitler and the Nazi Party to power, and Germany began to embark on the path of aggression and expansion.
Throughout the 2020s, America's history from boom to collapse to worldwide economic turmoil is full of lessons. Behind the prosperity is the illusion, behind the speculative carnival is the beginning of tragedy. This history teaches us that a semblance of economic prosperity does not mean that everything is fine, and that risks and crises can come at any time. We should also be wary of greed and excessive speculation, and seek a more robust and sustainable economic development model.
The above content and materials are derived from the Internet, and the author of this article does not intend to target or allude to any real country, political system, organization, race, individual. The above does not mean that the author of this article endorses the laws, rules, opinions, behaviors in the article and is responsible for the authenticity of the relevant information. The author of this article is not responsible for any issues arising above or related to any of the above, nor does it assume any direct or indirect legal liability.