There is no origin or clear set of elements that led to The Great Depression. Economist, political scientist and historians have suggested diverse explanations that place contrasting intensity on various elements and affairs. One thing remains fair, it was an interaction of a convoluted set of elements, some economical, political and social that led to The Great Depression. In this study I will concentrate on two aspects.
• Economic impact of the great war – When the war began in August of 1914, no one thought that it would carry on for four long years, include so many nations, include machinery and mechanization so much, take so many lives, cause a lot of destruction, and a great loss of money. The war caused far-flung destruction in European countries; meanwhile it was causing an economic boom in the non-European countries such as America, Brazil, Canada, Argentina and Australia. The European powers acquired debts to fund the war. The worst economic tradition of the war was that it made the government to unwillingly leave the “gold standard”. Countries started printing paper in exuberance of what their decreasing gold reserve would permit, it led to high inflation, increasing prices and collapsing purchasing …show more content…
stock market boom and crash of 1929 - as Europe was suffering the American economy was at an all time high. American investments started rolling in to Europe and Germany in the style of foreign investments for German industries, and in the form of financing to buy European sovereign bonds. In the 1920’s, war inflation came to a halt and span into mild deflation; it constituted new assurance in the economy. All Americans wanted to engage in the wave of expansion, so they did this through the stock market. Stock prices were high, everybody was a winner and it captivated more investors to the market. Things were going to well; it was a situation that could definitely not last forever. The Federal Reserve began raising interest rates to calm the
• Economic impact of the great war – When the war began in August of 1914, no one thought that it would carry on for four long years, include so many nations, include machinery and mechanization so much, take so many lives, cause a lot of destruction, and a great loss of money. The war caused far-flung destruction in European countries; meanwhile it was causing an economic boom in the non-European countries such as America, Brazil, Canada, Argentina and Australia. The European powers acquired debts to fund the war. The worst economic tradition of the war was that it made the government to unwillingly leave the “gold standard”. Countries started printing paper in exuberance of what their decreasing gold reserve would permit, it led to high inflation, increasing prices and collapsing purchasing …show more content…
stock market boom and crash of 1929 - as Europe was suffering the American economy was at an all time high. American investments started rolling in to Europe and Germany in the style of foreign investments for German industries, and in the form of financing to buy European sovereign bonds. In the 1920’s, war inflation came to a halt and span into mild deflation; it constituted new assurance in the economy. All Americans wanted to engage in the wave of expansion, so they did this through the stock market. Stock prices were high, everybody was a winner and it captivated more investors to the market. Things were going to well; it was a situation that could definitely not last forever. The Federal Reserve began raising interest rates to calm the