Red Space Rocket

In the 1920s the stock market was popular.
Many people had invested in the stock market which seemed like easy money.
Many people did this with borrowed money.
As profits fell people suspected stocks were over-valued.

October 24 1929 – The stock market crashed.
12 million shares sold in one day.
Many people and businesses lost everything.
People, businesses and government stopped investing and spending fell sharply.

The Chain Reaction

Fall in demand for goods.
High tariffs stop overseas sales.
The recently poor cannot afford them.

then …

Company profits fall.
Wages are cut.
Some people are sacked.

then…

Demand falls further because more people can’t afford goods.
Profits fall.
Wages are cut.
More people are sacked.

and so on and so forth.