Stock Markets Exposed

the stock market crash of 1929,what really happened during that time period?

Public Comments

1. People invested heavily with borrowed money and insider trading was out of control....so they say. When the stock market chucked, none of the banks could get their money back because none of the investors had the money to do it. People rushed to the bank to take out any money they had. People who had money in the bank couldn't even get it back because the banks had loaned it out to investors. There were no rules like we have today against some of these shady procedures. There was no social security or public aid to help out the old/poor people. Also, I don't think your money was insured by the bank like it is today.
2. This what really happened: the economy was very efficient and caused an increase of the difference between the rich and the poor. More and more money was looking for investments but proportionally less money was buying the productions of the said investments. Returns went down Asset prices went up. When all the assets get below the Market value for interest rate risk we get into Keynes' Liquidity Trap: everybody prefer cash rather than any long term investment. The market crashes. Because in a ca[italist economy money is created through credit for investmrnt the machine is broken.