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Causes Of The Great Depression

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1. Yee Haw!! 3. Causes of the Great Depression 4. Speculation <ul><li>Bull Market </li></ul><ul><li>Buying on the Margin…
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  • 1. Yee Haw!!
  • 3. Causes of the Great Depression
  • 4. Speculation <ul><li>Bull Market </li></ul><ul><li>Buying on the Margin </li></ul><ul><li>Speculation </li></ul><ul><li>Black Tuesday </li></ul><ul><li>Bear Market </li></ul><ul><li>Bank Runs </li></ul><ul><li>Speculative bubbles from the present? </li></ul>
  • 5. Even those who played it safe lost their credit Point values decreased dramatically, all but those who held tight lost everything they had and sometimes more Some students bought bonanza chips Students selected the “Go for the Gold” option Stock Market Crash 1929 Yee Haw
  • 6. Overproduction, Underconsumption, and Concentrated Wealth <ul><li>Mass production </li></ul><ul><li>Overproduction </li></ul><ul><li>Underconsumption </li></ul><ul><li>Wealth Gap </li></ul><ul><li>Downward spiral </li></ul><ul><li>Speculative bubbles from the present? </li></ul>
  • 7. Government Assistance? <ul><li>Tariffs worsen things </li></ul><ul><li>Hawley – Smoot Tariff Act 1929 </li></ul>
  • 8. The Stock Market Crash of 1929 The business sells two shares of stock for $100 and invests it in land. The businessman has $0 The land that the business bought was overpriced because of speculation and becomes worthless. The business no longer has enough money to operate. The recipient takes a $100 loan from the bank. The recipient has $100 . The recipient buys two shares of stock for $50 each. The recipient has $0. Buying with loaned money is referred to as buying on the margin. Speculation causes stock prices to rise to $75.   The recipient takes another $150 loan. And buys two more shares of stock. The recipient has $0.     European investors get nervous and start selling their stock investments. As prices fall, they gain momentum. The recipient attempts to sell all four of his stocks for $25 each, for a total of $100. The bank gives a $100 loans for $20 up front. The bank has $20.                   The bank gives a $150 loan for $30 up front. The bank has $50 The Business The Borrowers The Banks
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