Stock Market Bubble

The Great Depression was one of the worst and the biggest blows in the world economy. The world economy began in 1930 and the economy collapsed. This economic failure has never been experienced and the economic failure that began in 1930 continued until 1939 and the extent of the subsequent influence was extremely serious for the liberal democratic economy. For the majority of the world's major economies, the total production has decreased by 25 to 30%, the unemployment rate has soared, 25% in the U.S. and the UK and 40% in Germany.

It is now widely believed that the stock market crash in 1929 did not lead to the Great Depression. On the contrary, the decline of the first economic activity from 1928 to 192 was the main determinant of the collapse of the stock market bubble. Since November 1929, stock market crash certainly exacerbated the economic downturn. It reduces arbitrary consumer spending (Romer, 1990) and creates greater income uncertainty that helps achieve contraction (Flacco and Parker, 1992). After November 13, 1929, the stock price began to recover and began to recover but a loss occurred due to the continued decline in economic activity, it fell again by May 1930, and in the summer of 1932 Continued to decline.

The stock market crash is due to a sharp decline in stock prices due to panic or major economic factors. When investors see the trend of price increases, they immediately enter the market and purchase shares to participate in the profitability of the shares, they often follow the speculative stock market bubble. Normally, once prices begin to decline, most investors try to withdraw from the market at the same time, and the bubble will burst and suffer a huge loss. In order to avoid further losses, investors begin panic selling during the crash, ie they release themselves from their falling stocks and hand over the problem to other investors. This panic selling led to a decline in the market, which ultimately collapsed and affected everyone. Usually, there was a depression after the stock market crash.

In the not too distant future, the outlook for the recession and the bearish market has shocked stock market investors, especially given that the US stock market is experiencing dangerous bubbles rather than a healthy bullish market. For more information, please read the detailed stock market bubble report at my recent Forbes. In many ways, the valuation of the US stock market is higher than the important past market peak. According to the ratio of US stock market value to GDP (also known as Warren Buffett 's "favorite index"), the market is more expensive than network bubble.