Global Depression

To most Americans who know anything about the Great Depression, they will say that it was a bad time. The 1932 depression hit most people as a shock partial because it was not just a loss of growth in economics, but a decline in the economy. The previous years had gone to begin much of the success that America is still looked at for today. Meaning, America did not just fall from a regular period, and to make such a fall it would not only require the loss of this age, but a downfall so strong that it could take down the nations golden age (And yes, this was actually a high point, not just a high point for America).

"At the time of the crash, New York City had grown to be a major metropolis and its Wall Street district one of the world's leading financial centers. The New York Stock Exchange (NYSE) was the largest stock market in the world. The Roaring Twenties was a time of prosperity and excess in the city, and, despite warnings against speculation, many believed that the market could sustain high price levels. Irving Fisher proclaimed shortly before the crash, "Stock prices have reached what looks like a permanently high plateau."[1] The euphoria and financial gains of that great bull market were shattered on October 24, 1929, Black Thursday, when share prices on the NYSE collapsed. Stock prices fell on that day and they continued to fall, at an unprecedented rate, for a full month."

One way in which this is often looked at from is the fall of the stock market. The part of this that is overlooked is that the stock market is a place for trade. It is a method which allows anybody to 'purchase' or invest in part of a company. So what happened when the stock market crashed? Why did it crash? A stock market crash is when everybody decides to sell. A time when there is not any money invested in a particular thing. As to why this occurs I am not particularly sure. However, I am sure that America had built up some debt from the War. The growth of the economy in the years before the depression did help resolve some of this, however it did not solve the problem. The concept of the stock market crash can also be applied in the way that the physical trade of imports and exports for other countries came to a slow. For those countries, this meant that those products they normally would receive were not there to sell, and that meant less money flow. It would be the same as if we stopped importing from other countries. China would loose a lot of money because America is a huge market. The United States would loose a large portion of its economical growth, because there would not be exports of many popular electronics such as iPods. The rich would stay rich, and the poor would stay poor, there would be a lose of the Plebeians.

From an American standpoint most people tend to look at the Great Depression as something that happened in America, which it did. The problem is that a lot of Americans tend to forget that this was not just an American thing. In Europe this event was known as the "Great Slump". Though the whole world was effected, most of the world went by something known as the the "Great Depression". For the countries which had previously chosen to remove themselves from interactions with other countries and remain self dependent, the depression had a minor effect. As for the others which heavily relied on other countries, a period of depression was created. It is a given that the depression is somewhat an American thing, but what happened is that other countries were effected by this even in such a way that it lead them it to their own depression. Many times it seems like this is missed because it is a bit off from the actual event, and often the actual event is all we look at and not any further consequences.

Bernanke. Essays on the Great Depression. Princeton University Press. 2000

Harberlet, Gottfried. The World Economy, Money, and the Great Depression, 1919-1939. American Enterprise Institute for Public Policy Research. 1976