Global Financial Crisis 1929 and The Recession of 1958

The Great Depression was a worldwide economic downturn starting in most places in 1929 and ending at different times in the 1930s or early 1940s for different countries. It was the largest and most important economic depression in modern history, and is used in the 21st century as an example of how far the world's economy can fall. The Great Depression originated in the United States; historians most often use as a starting date the stock market crash on October 29, 1929, known as Black Tuesday. The end of the depression in the U.S is associated with the onset of the war economy of World War II, beginning around 1939.

The depression had devastating effects in virtually every country, rich or poor. International trade plunged by half to two-thirds, as did personal income, tax revenue, prices and profits. Cities all around the world were hit hard, especially those dependent on heavy industry. Construction was virtually halted in many countries. Farming and rural areas suffered as crop prices fell by roughly 60 percent. Facing plummeting demand with few alternate sources of jobs, areas dependent on primary sector industries such as farming, mining and logging suffered the most. However, even shortly after the Wall Street Crash of 1929, optimism persisted; John D. Rockefeller said that "These are days when many are discouraged. In the 93 years of my life, depressions have come and gone. Prosperity has always returned and will again.

The Great Depression ended at different times in different countries; for subsequent history see Home front during World War II. The majority of countries set up relief programs, and most underwent some sort of political upheaval, pushing them to the left or right. In some states, the desperate citizens turned toward nationalist demagogues—the most infamous being Adolf Hitler—setting the stage for World War II in 1939

The Great Depression ended

The turning point in the depression was in 1933, as can be seen in the above Industrial Production graph. Some economists attribute the subsequent recovery to monetary expansion that began after the bank holiday a few days after Roosevelt was inaugrated on March 4, 1933 and devaluation of the U.S. dollar that was then tied to gold.

Financial Crisis - 1929 Repeated in 2009

Indian Perspective

November 2008 Global Meltdown 1929 Repeated... Stock Market is at all time low and everyone is discussing about Global Meltdown and its all possible effects on Indian economy and Indian Investors. Fear has taken toll over Greed and now everyone is worried with one Common Question – What’s NEXT?

Stock Market is always acting as a barometer of any Economy. Current level of stock market has pushed us to the year 2006 where Sensex was at the level of 10,000. It took 28 years for Sensex to reach at the level of 12000 in year 2007 and Sensex took only one year to reach at the level of 21000 from 12000. What happened during 2007 to 2008? Was it over optimism? The current downfall of Sensex is attributed by unprofessional practice and misjudgments of so called Master Brains. Analysts say that the current global meltdown is similar to Great Depression of 1929. Let's look at great depression and check its similarity with current slowdown. World war in any case is root cause of any In 1927, Britain ran into trouble with its gold development or devastation of economy. The freeing standard again and Ben Strong lowered US of capital from government to use to commercial use interest rates in sympathy for a second time. Following World War 1, caused commodity price to This ignited the boom into the speculative frenzy inflate. In 1920, Ben Strong of the US Federal Reserve that brought the market to its peak on Bank of New York raised interest rates sharply to September 3, 1929. It was like pouring gasoline prevents inflation. This caused a recession and the stock onto a fire? the flames rose up, no lasting fuel market to fall. Once hard assets like commodities and was added, but the economy sure looked great. Real estate were no longer rising in price, money began Ben Strong died in October 1928. George to pour into stocks and bonds. The Dow started Harrison, his successor immediately lobbied for climbing from its low at 63.90 in 1921 and rose 150% higher interest rates to cool the speculative over the four years to 1925.fervor. Rates were finally raised 1% in August of 1929, but by then it was way too late. The Dow It was in 1925 that Ben Strong made a secret peaked at 381.17. The market and the economy commitment to Montague Norman, Governor of the had buoyed itself from one source of hope to Bank of England, to help England reinstate the Gold the next for a whole decade. First it was the end Standard. This action would later be shown to have of war? related inflation and booming exports for undermined the British economy but the Pound had war reparations, next artificially low interest been the main medium of international exchange at rates in 1925 and 1927 and booming exports that time and it was felt to be in everyone's interest to due to a reduced value of the Dollar vs. they have it be exchangeable for gold. With moral support Pound. There was major tax reductions from the US Treasury, Strong chose to help strengthen instituted by the Republicans under Hoover and the value of the Pound by depressing US interest rates. Finally in June of 1929 an international accord This depressed the value of the US Dollar and caused was struck with the Germans (albeit short? lived) the already robust economy to boom. It was suddenly over the financing of war reparations, a major cheaper to borrow money to invest in the stock market issue of the decade.(Called margin investing).With artificially low interest rates and a booming economy people and companies were more apt than ever to invest in grandiose business expansions and over? Priced stocks. Mergers and acquisitions soared.