13.-Stock Market Crash-causes- 1929 Stocks prices were grossly inflated, did not have real value-watered stock prices. People were buying stock on credit. Overspeculation during the 1920's led to watered stocks. Buying on margin led to people being in debt and watered stock prices. Stock brockers would loan to people on 10%. Overproduction of goods they were buying on credit and went in debt. Under-consumption of goods people aren't buying. Too much borrowing from banks. Federal reserve increased interest rates bank borrowed and help stop bank failure. Lack of government regulation on what banks did.
You need to be a member of History 360 to add comments!
Comments