Why US stock market collapsed 1929
- Created by: edie cooke
- Created on: 04-05-13 11:40
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- Why US stock exchange collapsed in 1929.
- LONG-TERM
- Overproduction of agriculture and consumer goods, market was saturated.
- Laissez faire attitudes under Harding and Coolidge meant little regulation that would prevent the stock market boom going 'over the top'
- Nature of the Bull Market.
- Lack of credit control meant investors were encouraged to speculate and rely on share prices continuing to rise.
- What comes up, must come down!!!
- Buying of stocks and shares went out of control and value was far higher than real worth of economy
- Buying shares 'on the margin'.
- Lack of credit control meant investors were encouraged to speculate and rely on share prices continuing to rise.
- Lowering of US interest rates led to an increase of speculation, in order to strengthen British Sterling and the plan to return it to Gold Standard.
- Overproduction of agriculture and consumer goods, market was saturated.
- SHORT-TERM
- Boom of 1920's seemed unstoppable, strong confidence in share prices.
- September 1929 prices began to edge down.
- Soon people started to realise shares owned are worth less than what they bought them for.
- Everyone started worrying and tried to sell their shares for less and less.
- Black Tuesday 29th October 1929, share prices collapsed.
- Everyone started worrying and tried to sell their shares for less and less.
- Soon people started to realise shares owned are worth less than what they bought them for.
- September 1929 prices began to edge down.
- Boom of 1920's seemed unstoppable, strong confidence in share prices.
- LONG-TERM
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