Warm-Up  What would you do with $2 million?  You invested and got rich…quick! In a paragraph or more, tell me all about your plans. What will you do with 2 million dollars?

THE GREAT DEPRESSION FROM BOOM TO BUST “Brother, can you spare a dime?

Bad News!  Did you put your money in the bank? Did you reinvest it? Did you spend it on lavish things?  People in the 1920s “BOOM” had to make similar choices, but then had to deal with the consequences.

Buy Now, Pay Later  People wanted the new products of the 1920s, but didn’t always have the cash to pay for them  Credit developed to allow people to “buy now, pay later”  Consumers built up so much debt because they kept trying to buy all the new products.  Factories overproduced  Consumers couldn’t buy everything

The Stock Market and Credit  Speculation: investing in risky businesses in hopes of making a large profit  On margin: paying a small percentage of the total price of a stock with the “promise to pay” the rest at a later date  It was the equivalent of buying stocks on “credit”

The end of prosperity  Black Thursday: October 23, 1929, stock prices dropped, and within hours investors lost more than $5 billion.  Black Tuesday: October 29, 1929 people tried to go to the bank and withdraw any/all money they had.  Long lines, bank doors were locked, banks had to close as they didn’t have the cash to give out.  This was the start of the Great DepressionGreat Depression

The Great Depression  Worst and longest economic collapse in the history of the modern industrial world lasting until the early 1940s  Spread from the US to the rest of the world, impacting all industrial countries.  Decline in the production & sale of goods  Rise in unemployment  Businesses and banks had to close  People lost jobs, savings, homes and many depended on charity