As early as 1926, there were signs that the boom was under threat - this was seen in the collapse of land prices in Florida.
Eventually, there were too many goods being made and not enough people to buy them.
Farmers had produced too much food in the 1920s, so prices for their produce became steadily lower.
There were too many small banks - these banks did not have enough funds to cope with the sudden rush to take out savings, which happened in the autumn of 1929.
Too much speculation on the stock market - the middle class had a lot to lose and they had spent a lot on what amounted to pieces of paper.
The Wall Street Crash of October 1929 was a massive psychological blow.
America had lent huge sums of money to European countries. When the stock market collapsed, they suddenly recalled those loans. This had a devastating impact on the European economy. The collapse of European banks caused a general world financial crisis.
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