Coaches Round Table

How the stock market crash of 1929 could have been prevented?

could the 1929 crash of the stock market been prevented? How? Did the government do anything that could have caused the stock market to crash during 1929?

Public Comments

1. That answer could EASILY fill a 40-50 page term paper. There are no quick or absolute answers to that one. Sorry
2. The US government most certainly did!!! They got caught up in euphoria before the disaster. Only the Federal Reserve were white in the face, because they knew what was about to happen, but people were borrowing so much to invest, that if the Feds raised interest rates they would have crashed the market themselves. This Documentary might give you some ideas: http://video.google.com.au/videoplay?docid=7233622324068640582&ei=V-fQSa2GHITMwgPPovTZDA&q=1929&hl=en To learn more about the Wall Street 1929 crash: http://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929
3. This would be a book or an extensive thesis or dissertation. No one is going to do that homework here. I can tell you that the gov screwed up the economy and the market and kept the US in Depression for raising taxes on individuals, and on business and created socialist programs that if not addressed properly could create sever financial issues for the the USA in the future. Frontline: $10 Trillion and Counting http://www.pbs.org/wgbh/pages/frontline/tentrillion/ Note: the first part (of the above program) is Bush bashing with some good arguments. The last part where they show the graphs and address actual projections of entitlements and not argue solely on politics is what I would pay attention to. In addition during the late 1920's, the FED made a series of pre-Depression interest rate (increase) blunders just like it did in 1998-2000, and 2004-2006.
4. They could have raised margin requirements from 10% to 60%, thus severly limiting the rampant speculation (with borrowed money) in stocks. But even then, they could have prevented the stock market crash from degenerating into the great depression, if they had done a few things. Amongst these would have been 1) guarantee bank deposits, 2) lowering interest rates, 3) deficit spending. And congress could have done their part, by NOT PASSING Smoot-Hawley trade bill. The government, by their actions turned the stock market crash (from a severe recession) into the great depression.