I read a good book this month: "The Great Crash 1929" by John Galbraith. I took it out from my local library, so I didn't have to spend any money on it. It is all about the the stock market crash of 1929, which brought ruin to many people and organisations. We have just witnessed one of the greatest financial upheavals in history, so looking at the past may provide valuable lessons on how to profit from it.
The most fascinating piece of information for me, was that it was a complete myth that people were jumping off the top of buildings because they lost all their money in the stock market! The suicide rate remained exactly the same! The book printed the actual suicide statistics. I always took this myth to be a fact, and I had even studied it at school. The Great Crash of 1929 therefore was not the big catastrophe I thought it was. People got through it.
When reading the book, I had to keep checking the publication date, as the facts were so similar to what is happening right now. The book was written over 50 years ago (around 1954). Just like today, the banks were lending billions of money, to the common man. The man on the street was trying to get rich quickly via stocks. There was a system of bank regulation which turned a blind eye to the actions of the bankers. The bubble burst when people questioned the true value of their investments and the banks stopped lending. Many banks and individuals went out of business, just like today.
The book shows that a financial disaster did occur, but life went on. You can't blame people for trying to get rich, but caution needed to be exercised. The book was very general and just gave an overview of what happened. It wasn't detailed enough for me, and I would have liked the author to propose theories on how it could have been avoided. What I learned is that the media hype up financial disasters so they look much worse than they actually are.
The most fascinating piece of information for me, was that it was a complete myth that people were jumping off the top of buildings because they lost all their money in the stock market! The suicide rate remained exactly the same! The book printed the actual suicide statistics. I always took this myth to be a fact, and I had even studied it at school. The Great Crash of 1929 therefore was not the big catastrophe I thought it was. People got through it.
When reading the book, I had to keep checking the publication date, as the facts were so similar to what is happening right now. The book was written over 50 years ago (around 1954). Just like today, the banks were lending billions of money, to the common man. The man on the street was trying to get rich quickly via stocks. There was a system of bank regulation which turned a blind eye to the actions of the bankers. The bubble burst when people questioned the true value of their investments and the banks stopped lending. Many banks and individuals went out of business, just like today.
The book shows that a financial disaster did occur, but life went on. You can't blame people for trying to get rich, but caution needed to be exercised. The book was very general and just gave an overview of what happened. It wasn't detailed enough for me, and I would have liked the author to propose theories on how it could have been avoided. What I learned is that the media hype up financial disasters so they look much worse than they actually are.
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