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False Prosperity: People relied too much on mass production and too much clothing, farming equipment, and auto mobiles were produced, but people could not afford these products.
This caused an abundance of products to be thrown away and wasted negatively affecting the economy as well. -
Speculation: Brokers invested $8.5 in 1929, compared to $3.5 billion in 1927, on stocks and investments that were were very high risks.
This led to the stock market greatly rising after the Great Depression. Then, people sold the stock and a lot more money in stock was sold than the stock was actually worth. -
Stock Market Crash: The Dow dropped and people began selling their stock in fear of the Dow dropping even more. 16,410,030 shares on the New York Stock Exchange were traded on October 29, 1929.
This is also called "Black Tuesday". Millions of dollars were lost from thousands of investors. A major cause of the Great Depression. -
Banking Crisis: A lot of money was withdrawn and 9,000 banks had to close, in 1933, so bank runs (americans withdrew their money when banks began to fail) didn't put them out of business.
This caused many banks to run out of money so many banks had to close. Therefore people did not have money to use to buy things from stores and factories. -
Unemployment: Many factories closed due to people not buying their products and salaries of farm workers dropped significantly.
People did not have enough money to buy what was being mass produced so there were tons of excess products being produced for no reason. -
Trade Collapse: Foreign countries raised import taxes Weimar republic was unable to pay reparations.
There was a 30 % increase in tariffs on German goods by the United States, England and France. Both economies went down and there was a lack of goods as well.
