a CRISE de 1929 e a GRANDE DEPRESSÃO

Summary

In this video, Tinôco takes us on a journey through the economic boom in post-World War I America, leading to the catastrophic 1929 Stock Market Crash and the Great Depression. He explains how speculative investments, unchecked market manipulation by Wall Street elites, and the reckless use of credit caused the financial collapse. The crisis not only devastated the American people but also had global repercussions, influencing political movements worldwide. The video also touches on the steps taken by President Franklin Roosevelt to rebuild the economy and restore public confidence after the crash.

Takeaways

• 😀 In December 1918, after World War I, Europe was in financial ruin, while the U.S. was thriving with prosperity, innovation, and wealth.
• 😀 The U.S. government used war bonds to involve citizens in financing the war, creating a widespread interest in investment for the first time, with over 66 million people participating.
• 😀 The 1920s marked a period of rapid economic growth in the U.S., fueled by consumerism, credit, and technological advancements, especially the rise of Ford cars and household appliances.
• 😀 Charles Mitchell saw an opportunity in the growing interest in stocks and turned the public into investors, driving a stock market boom.
• 😀 Speculation, where stocks were bought for more than their actual value, was widespread, inflating the stock market and contributing to the eventual crash.
• 😀 Celebrity involvement in investments, including Charlie Chaplin, further fueled the stock market frenzy and created an illusion of easy wealth.
• 😀 By 1929, 90% of stock purchases were being made with borrowed money, creating an unsustainable financial bubble.
• 😀 The U.S. government, particularly under Republican presidents Warren Harding, Calvin Coolidge, and Herbert Hoover, failed to regulate Wall Street, despite warnings from experts like Paul Warburg.
• 😀 On October 24, 1929, the stock market lost 11% of its value, and by October 29, the Dow Jones saw a catastrophic 38% drop, leading to a global financial panic.
• 😀 The aftermath of the crash was devastating, with billions of dollars lost, mass unemployment, and widespread poverty, especially among the elderly, who lost life savings.
• 😀 The Great Depression lasted for a decade, leading to a global economic downturn, influencing the rise of authoritarian regimes, including Hitler's in Germany and Mussolini's in Italy.

Q & A

What caused the prosperity in the United States after World War I?

After World War I, the United States prospered largely due to the European nations being financially devastated by the war. The U.S. capitalized on this by selling war bonds and gaining massive profits, which fueled their economic growth. Additionally, the rise of consumer credit contributed significantly to the prosperity.

How did Charles Mitchell contribute to the economic boom in the 1920s?

Charles Mitchell saw an opportunity to leverage the success of war bonds by introducing stocks as a form of investment for the general public. He turned the idea into a product where people could buy shares and receive profits, which led to a surge in the stock market. He also opened stockbrokers across the U.S. to make it easier for ordinary people to invest.

What was the difference between speculation and investment in the stock market?

Speculation refers to buying stocks at inflated prices with the hope that their value will increase, while investment means buying stocks at their actual value, based on the company's performance. During the 1920s, much of the stock market activity was speculative, which contributed to the market's instability.

How did celebrities influence the stock market in the 1920s?

Celebrities like Charlie Chaplin became involved in stock market speculation, which in turn drew more public attention to the stock market. The media publicized these activities, creating a cycle where celebrities became investors, and investors, in turn, became celebrities, further fueling the market frenzy.

What role did credit play in the economic boom of the 1920s?

Credit allowed people to purchase more goods and invest in stocks without needing the full amount upfront. This fueled consumer spending and stock market speculation, as people borrowed money to buy stocks and used their earnings to repay the loans. By the end of the decade, 90% of stocks were being purchased with borrowed money.

Why did the stock market crash in 1929?

The stock market crash of 1929 was caused by excessive speculation, where stocks were inflated beyond their real value. When the market started to fall, panic set in, and people rushed to sell their stocks. The lack of regulation and the widespread use of borrowed money to invest exacerbated the collapse.

What was the immediate impact of the stock market crash on the American public?

The immediate impact was devastating, with people losing their savings, particularly those who had borrowed money to buy stocks. Many people became desperate, some even resorting to extreme actions like jumping out of windows. Banks also began to fail, as they had invested heavily in the stock market.

How did the government respond to the stock market crash and the ensuing Great Depression?

Initially, the government, particularly under Presidents Harding, Coolidge, and Hoover, took a hands-off approach, believing the market would self-correct. However, after the crash, Franklin Delano Roosevelt was elected and introduced the New Deal, which included banking regulations, social programs, and reforms to restore public confidence.

How did the Great Depression impact the global economy?

The Great Depression had a far-reaching impact on the global economy. The lack of U.S. demand led to decreased exports, particularly affecting European countries. Nations like Germany, which were already struggling after World War I, suffered even more due to the loss of financial support from the U.S.

What were the long-term political consequences of the Great Depression?

The Great Depression led to a rise in authoritarian movements around the world, as people sought solutions to the economic crisis. In Germany, support for Adolf Hitler grew, while in Italy, Mussolini's fascism gained traction. Similarly, in Russia, Stalin's communist regime became more powerful, reflecting a shift in political ideologies as a response to the economic collapse.