The Great Depression was the greatest and longest economic recession in modern world history. It began with the U.S. stock market crash of 1929 and did not end until 1946 after World War II. Economists and historians often cite the Great Depression as the most catastrophic economic event of the 20th century. The Stock Market Crash During the short depression that lasted from 1920 to 1921, known as the Forgotten Depression, the U.S. stock market fell by nearly 50%, and corporate profits declined over 90%. However, the U.S. economy enjoyed robust growth during the rest of the decade. The Roaring Twenties, as the era came to be known, was a period when the American public discovered the stock market and dove in headfirst. Speculative frenzies affected both the real estate markets and the New York Stock Exchange (NYSE). Loose money supply and high levels of margin trading by investors helped to fuel an unprecedented increase in asset prices. The lead-up to October 1929 saw equity prices rise to all-time high multiples of more than 30-times earnings, and the benchmark Dow Jones Industrial Average increased 500% in just five years. Welcome back to The Atlantis Report. You are here for your daily dose of the truth, the whole truth, and nothing but the truth. Please take a second to smash that like button. And as You know friends, I rely totally on your donations to keep this channel functional, as you know, it takes a crazy amount of research and time to bring you this content on a daily basis, so I hope you consider helping with whatever donation you can afford. Thank You. Today we analyze the great recession the similarities between the past recessions and the looming one of today and the ways you should prepare to survive and thrive the recession. The Recession of 1918 is often called the greatest financial crisis in the history of the United States because it lasted ten years and crashed the entire economy. The American leadership tried everything to save the economy but nothing worked out, every solution proved to be ineffective in the face of such a crisis, and the only thing that could save the economy was the deadliest war in human history the second world war. Its July of the year 1914, world war one breaks up, and the entire European continent is in conflict, but the war slowly spreads to the rest of the world. Everyone is eager to win, but unfortunately, supplies are limited, especially food. So the allies turn to the United States for help, since it wasn’t directly affected by the war and had the economic power to do that. War by no means is good, but it brought a period of economic prosperity to the United States. The demand for equipment, weapons, wheat was at an all-time high, and no one else could fill that gap except the US. If you were a farmer, you could produce as much wheat as you wanted and could sell it easily at a high price. Since countries with troops at the battlefield had to take any measures to win the war. By the end of the war, the United States also entered the game, which further increased the demand since soldiers needed equipment and food. It was probably the best time to invest since the economy was booming, and everyone was making money. Even though the war has ended by 1918. The demand for American goods, especially wheat, didn’t fall because the entire world was still recovering. When farmers realized that, they began taking huge loans to buy more land and equipment to farm more wheat. Which led the real estate prices to grow. That pushed people to buy even more lands hoping to sell it later for a higher price. The same thing was happening to every other industry. In fact, many companies emerged that only existed on paper but didn't even have the equipment or land because everyone was throwing money into the stock market, hoping to make a fortune, which further escalated the prices. Would you really stand aside and watch how your neighbors make money while you get nothing. Even foreign countries started investing in the united states hoping to make a buck. I guess you can already see the flow. Many companies were overpriced since most of these investments were based on speculations. Nonetheless, that didn't stop people from investing. People had faith in the economy. When things are good, you start thinking that it's going to be like that forever. What seems so obvious today wasn't obvious then. However, When Europe started recovering, the demand for American goods fell, especially for wheat, since other counties began to grow wheat as well. In August of 1929, France and Italy were bragging of a magnificent harvest, while the US had millions of bushels of wheat on the shelves that they couldn’t sell. This oversupply threatened to drive the prices down. It caused a little panic in the stock market but didn't cause anything significant. A month later, the wheat prices decreased from $1.49 per bushel to $1.31 because of the oversupply. It was devastating news, the stock market plummeted. People got frightened and began to sell their stocks to cash out before the stock market declines further. That only made the situation worse crashing the market even more. That day, October 29th went down in history as Black Tuesday. However, that was just the beginning. Since wheat prices were falling, farmers couldn’t pay back their debts, which created pressure on the banks. The panic has already spread to the entire country, and all that people cared about was cash, so they rushed to the Banks for their savings. Unfortunately, banks couldn’t pay back their obligations since their borrowers weren't able to pay them back their debts, so they had to shut down one after one. In just ten months, 744 banks failed. It didn't matter whether you had a good or bad business, people lost faith in the market, and all that mattered was to minimize the losses. As a result of that, even good legit businesses started declaring bankruptcy. The news spread to Europe and caused panic over there since many European countries have invested heavily in the United States. The panic caused the same thing over there, and soon the entire world was facing a great depression. Although this crisis happened almost a hundred years ago, financial crises, in general, are pretty similar, including the dot-com bubble of the 2008 crash. And the next global recession is going to take place in a very similar way. Nobody really knows for sure how and when exactly it's going to start, but we have multiple bubbles that are big enough to burst at any moment, such as student loans, healthcare, and, most important, the stock market itself. Since the last crisis, S&P500; has increased dramatically, this growth is definitely unsustainable, and when it crashes, it's going to create a panic that's simply going to make things much worst. We can't really avoid the recession because the world economy is so interconnected and dependent on each other that a crisis in the largest economy in the world, will take down the rest of the world with it. One thing is sure is that the recession isn't going to be forever. It might last a year, maybe two, maybe five, but eventually, it will recover. Just a year after the 2008 crash, in 2009, the sp500 increased by 26.5 percent. So don't panic and sell your investments when the media are shouting all over the place that if you don't sell now, you are going to lose every damn penny you have invested. Of course, some companies won't survive the crisis and go bankrupt as it happens in every crisis, but if you are an investor in an index fund, you should be fine. You probably will lose your job because companies will start cutting costs in order to survive, so if you are not vital to their survival, you might be unemployed, so make sure you have some savings on the side, at least. But the smartest investors will start investing heavily because prices will be at their lowest point. And once the economy recovers, they will be much wealthier. That's why they say. The rich get richer. It’s important you PREPARE for a recession in ways you can CONTROL: First, you CAN control whether or not you keep a 3-6 month fund in the event you lose your job or something unexpected comes up. This is absolutely ESSENTIAL for you to do. Second, you CAN control whether or not to have too many outstanding debts that might need to be paid down. If you’re over-leveraged, or if you have high-interest debt, it’s in your best interest to pay those off to free up cash flow in the event of a downturn. You CAN control how much you spend…if you’re spending is too high, it’s important to cut those back so that you can save more money to invest. And when you DO invest, invest long term. Ideally, these are investments you should plan to keep 10-20 years. For me, I see lower prices as an opportunity. And to alleviate some of these concerns, you don’t need to just drop ALL of your money in the market at once. Buy a small amount each and every month. This way, if the price goes down. you’re buying in cheaper and cheaper over time. If it goes up, you’re buying in a little bit little. And anytime when it comes to investing, slow and steady wins the race. This isn’t about making an immediate 10% profit in a month. This is about investing for your future in a slow, stable way where you don’t feel stressed whether the market goes up or down. This was The Atlantis Report. Please Like. Share. Leave me a comment. Subscribe. 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