1. Check out these amusing ads from the 1920s! Don’t forget to be skimming your book @ home: Reconstruction  WW2

2. $$ More Money, More Problems $$ Installment buying: buying on credit Buyers could take home a new fridge by putting a down payment & each month they paid an installment until they paid the full price PLUS INTEREST Buyers could take home a new fridge by putting a down payment & each month they paid an installment until they paid the full price PLUS INTEREST “Buy Now, Pay Later” increased the demand for goods “Buy Now, Pay Later” increased the demand for goods $25,000 paid at once $5,000 paid over 5 times WHICH WOULD YOU RATHER DO?

3. Interest: monetary dues owed over time as a result of credit $5,000 five times = $25,000 (w/interest = $ 30,000 )

5. Soaring Stock Market Boom of the 20s gave the stock market a giant boost Boom of the 20s gave the stock market a giant boost Corporations sold stocks: shares of ownership sold to investors Corporations sold stocks: shares of ownership sold to investors – Investors made or lost $$ depending on whether the price of shares went up or down

6. Bull Market By late 20 s : more people were investing in the stock market than ever By late 20 s : more people were investing in the stock market than ever – Stock prices rose so fast some people made fortunes overnight (this encouraged more to buy) – Bull market: period of increased stock & rising stock prices

7. Margin System Many people bought stocks on a margin system: Many people bought stocks on a margin system: – An investor would buy stock for as little as 10% down payment – The buyer held the stock until the price rose & then sold it at profit – Margin buying worked as long as stock prices kept going up This works for me…

8. Problems Rising In 1928 & 1929 – prices of many stocks rose faster than the value of the companies themselves In 1928 & 1929 – prices of many stocks rose faster than the value of the companies themselves – Experts warned that the bull market couldn’t last forever – Most investors ignored the warnings

9. Limited Role in World Affairs After WW1, U.S. was world’s leader in economic power Europeans expected U.S. to take a major role in world affairs Harding & Coolidge wanted to continue peace in Europe, however they didn’t want the job of KEEPING world peace Many Americans supported this return to pre-war isolationism

10. Latin America During WW1 LA nations had been cut off from Europe During WW1 LA nations had been cut off from Europe – Result: U.S. trade/ investment in LA increased – Trade continued after war – U.S. limited its role abroad for fear that more involvement may push the country into war again

11. Soviet Union Lenin is now the big cheese in Russia since the revolution Lenin is now the big cheese in Russia since the revolution Lenin created the world’s first communist state (marx  lenin) Lenin created the world’s first communist state (marx  lenin) – Communism: economic system in which all wealth & property is owned by the community as a whole U.S. refused to recognize Lenin’s government & disliked the idea of communism U.S. refused to recognize Lenin’s government & disliked the idea of communism – Think…why?! What is U.S. built on?

12. Post WW1 many people favored disarmament: a reduction in the armed forces & weapons of war Harding & Coolidge also supported peace efforts Pursuing Peace

13. 1928 – U.S. & 61 other nations signed the Kellogg-Briand Pact : a treaty outlawing war Treaty had a fatal flaw in that it didn’t set up any means for keeping peace One nation could still use force against another without fear of punishment

14. NOW: Brainstorm… You’ll have 5 minutes to write as many things as you can…. Imagine you’re giving someone a tour of your house List the following per-room as you envision it: – Big pieces of furniture – Expensive artwork – Major appliances* this is a longer list* – Cars or other vehicles – Expensive technology (computers, TVs, laptops, etc…) **think you’re done? Make another lap! Inside/ outside/ basement/ attic, etc… ** WHO CAN LIST THE MOST???

15. Most likely, your parents bought most of these items in installments On average (Lowes.com, autobytel.com, bestbuy.com) : -New refrigerator: $480-$9,000 -New washer OR dryer: $300-$1,600 -New TV: $80-$8,500 -New car: $11,000 - $296,000 -To install an appliance: $380 -To refinish an appliance: $300 -To repair an appliance: $200 Something to think about!