1. PBS – Surviving the Dustbowl
Let’s look at the environmental causes of the Great Depression

2. The Great Depression

3. Now we will look @ the economic causes of The Great Depression

4. Credit: Buy Now… Pay Later
Interest =
1920s people began buying items on credit
Previously:
Installment buying becomes common practice 1) 2) 3) 4)
If you fail to make payments……

5. Speculation Get rich quick schemes Florida Land Boom Example:
Speculator =
Florida Land Boom Example:
Real estate developers selling lots on Florida coast to speculators
Many bought w/o ever seeing the land
Price for Florida real estate was rising (buy low, sell high = profit)
many bought useless land that was under water w/o knowing it
Hurricane hit, devastating Florida, real estate prices plummeted & speculators lost big (couldn’t sell land under water)
Does this happen today?

6. Speculation in Stock Market
Federal Reserve Board (Fed)
Main purpose =
Does this by ______________________
affects availability of credit (loans) & can increase or decrease $ supply
During roaring 20s interest rates were _________
What does this lead to?

7. Speculation in Stock Market
Low interest rates created bull market 
Led to buying “on margin”
What’s this mean?
Why would you do this?
What happens if the market dips?

8. Speculation in Stock Market (Bull Market)
What is stock?
FYI: Dow Jones Industrial Average (The Dow)
An average measure of stock performance
Currently made up of 30 large companies in various industries (McDonalds, Coca-Cola, Walmart, Disney)
Measured in points (sum of all 30 companies’ stock prices divided by a divisor… currently, every $1 change in price in a particular stock within the DJIA = 7.56 point movement)

9. Speculation in Stock Market (Bull Market)
DJIA doubled
People were trying “day trading” techniques
What is this?
Result:
September 1929: prices began to slip
Creditors began calling in on loans, which people could no longer afford
Wednesday, October 23, 1929:
Tuesday, October 29, 1929 “Black Tuesday”:

10. Speculative Bubbles What happened? Speculative bubble:
What have been our most recent bubbles?

11. Government Failure After 1929 Crash
During an economic downturn what gov’t policies usually get put in place & why? (think about what has happened recently)
What did the FED due after the Oct crash & why?
Consequences?

12. Run on the Banks Market crashed then what… The way banks “make” money:
When the market crashed the worst case scenario happened
Remember reserve requirements were low (FED)
By /5th of banks in business in 1930 were gone (3,800 failed in 1931 & 1932)

13. American Experience Crash of 1929

14. Ponzi Scheme Presentation (20 pts)
With a partner:
Research Charles Ponzi & his Ponzi Scheme
What was his scheme? (2 pt)
How did it work? (3 pts)
Find one example of a present day Ponzi Scheme & report back to the class what it is.
Discuss what the scheme is, who does it target, what can you do to avoid becoming a victim of it? (7 pts)
Create a quick public service announcement presentation that describes the original Ponzi scheme & a present day example
Can be poster, powerpoint, prezi, movie maker, etc. (5 pts)
MLA Citation (3 pts)

15. Maxed Out
Issues w/ credit today