The Crash Of 1929: Could It Happen Again?

The global economy has a life of its own and there have been a few spectacular crashes since we began trading stocks and shares. In this short article, we examine the factors that contributed to the Wall Street financial crash of 1929 and looks at the potential for a repeat in such an event in the near future.

The 1929 Wall Street Crash

The actual day that the stock market fell through the floor was named ‘Black Thursday’, which occurred on October 24th. There were many underlying causes and some would say that the Federal Reserve induced the crash and once panic ensued, everyone and their dog tried desperately to unload their shares while they still had some value. There were many suicides, as traders realised how much they had lost and the crash saw the start of a long depression that lasted a full 12 years.

Bad Government Policies

This was a major factor that led up to the Wall Street crash in 1929 and that was enough to cause a chain reaction and unemployment rose, causing havoc in the US and forcing the Federal Reserve to intervene. In the years preceding 1929, the US stock market grew at an incredible rate, continuing into 6 months of 1929. People were drawing their money from the banks and they couldn’t meet the demand.

High Volume Investment

People were mortgaging their homes to invest in stocks and shares, with some 300 million shares being held in margin and by September, prices started to decline. Initially the speculation continued and on October 18th, the markets fell through the floor. Suddenly, instead of a rush to buy, the opposite happened and investors scrambled to sell and by October 24th, almost 13 million shares were dealt.

Could There Be A Repeat?

There is always a chance of another major economic crash. The pandemic saw markets become very volatile, while many private investors moved their wealth into gold. This is usually the first thing investors do when there is a downturn in market prices, which is a wise move if you manage to see the downturn early. If you would like to move into a more stable commodity, go to City Gold Bullion in Brisbane and protect your wealth while you can.

Move Into Gold

The start of the pandemic saw many investors take their wealth out of stock markets, preferring the stability of gold and that drives the price of gold even higher, bringing you a better return on your investment. Once you register with a reputable gold bullion dealer, you can buy or sell at any time with a few mouse clicks, empowering you as a trader, as you can use their secure network to buy or sell gold bullion and coins.

There are many variables that can come together to cause a stock market tumble and the pandemic is still with us, which sends many investors to move their wealth into a stable commodity such as gold bullion.