Stock Market Crash

The Days Before
The value of the stock market rose right up till it crashed. Gold reserves grew and base resource production became more automated, therefore faster and easier. Those in producing sectors felt the force of overproduction price cuts. Where these zones were producing more they were not receiving more profit. There were warnings present had anyone bothered to watch or listen, just two months before Black Thursday the production rate in the U.S dropped by 20%.

Market Speculation
Though the buying of stock is widely regarded as a good way to get ahead it is never to be assumed to be a sound and foolproof investment. This was one of the issues that caused the crash in 1929. As stocks became more valuable many saw them as an easy way to buy a future of leisure. With prices rising, nearly universally, individuals purchased stock with plans for living off of the huge returns.

Marginal Purchases
Much of the money used in the purchasing of stock was provided by a broker or brokerages. These brokerages were able to keep up by taking portions of profits from the great many stocks with increasing value while nearly removing all costs by issuing ‘margin calls’ when the value of a stock fell below the value of the loan. This created many costs for those who made faulty investments. Additionally this allowed a great deal of stock to increase in value far beyond what would have been experienced in natural circumstances.