Didn't they also allow pre-Crash the purchase of stocks on credit, thereby creating a huge gap in real economic value when crunch time came and there was nothing to pay the piper?
Buying on margin. You can still buy on margin today yet it requires 70% to most firms. In the 1920s you could go buy a stock on margin and only put down 20%. So the issue is that you could make these risky moves and get good payoffs but you sometimes (and in the crash almost all experienced this) owing more then you took on margin leading to debt.
Plus the Crash was actually a reflection of multiple underlying causes. ...
All true. Plus, IIRC, there was declining birthrate at play, too, so declining real estate market & overall decline in purchasing. Plus a glut of agricultural production following WW1, due to efforts to increase production for the war--which, by opening marginal lands, helped contribute to (if not outright create) the Dust Bowl...Key point there kids. The stock market crash was a symptom of a declining economy, not a cause. One could make a long list of sectors that were showing slow or negative growth as the 1920s spun out. The sort of high risk investment patterns that developed through the decade are symptomatic of reduced returns in solid/safer investments. As returns on investment in businesses that actually do something decline a increasing number of people turn to higher risk venues, that are increasingly based on less productive, misunderstood, or fraudulent "opportunities". At some point the investment market starts to appear to be a pyramid scheme, or worse starts to function like one & the panic sets in.
Absent uninformed, and poorly thought out stock market investment in the 1920s the Depression still occurs, tho it would not have quite so sharp a starting point as the Crash of 29. Absent that the pop narrative would recognize other earlier and later failures of the economy, that were more fundamental.
All true. Plus, IIRC, there was declining birthrate at play, too, so declining real estate market & overall decline in purchasing. Plus a glut of agricultural production following WW1, due to efforts to increase production for the war--which, by opening marginal lands, helped contribute to (if not outright create) the Dust Bowl...![]()
...
There actually was a guy in South Carolina (?) who refused to listen about the coming of the Boll Weevils, planted his cotton anyway, watched it get destroyed, planted another years' crop of cotton, watched THAT get destroyed, before finally getting in his car along with his (thoroughly disgruntled) wife and moving to California.
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