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Wall Street Economic Collapse

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by

Kate W

on 7 December 2012

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Transcript of Wall Street Economic Collapse

Wall Street Economic Collapse BY:KATE WOODLEY AND NAOMI DESOUSA 83 1928. Banks were having a ball
investing in the stock market. But
then things went wrong and the banks,
who said they had more money to invest
than they actually did, lost almost all
of their money. This resulted in people
taking their money out of the banks for
fear of losing it. The banks then had very
little money, and so they started
charging a ton of interest on their
loans, making it very expensive to
take out a loan. When people can't get loans because the interest is too high, people can't buy big
ticket items like cars,
homes, or invest in things like education and renovations. People weren't
buying items, so
the companies
that make those
items didn't have
money to pay
employees, so
many people
lost their jobs. NO

JOB

=

NO

IN
CO
ME C
o
t
i
n
u
o
u
s D o m i n o e E
f
f
e
c
t Ironically enough, World War II was what ended the Great Depression- the government needed military supplies (weapons, food, shelter, etc.) so America got back on to its feet. REVERSE GLASS STEAGALL The government decided
that this cannot happen
again because America
almost became a bankrupt
country. The Glass Steagall is a law that the
government put in place so that commercial
banks* and investment banks ** stay
seperate so the Great Depression would never
happen again. *commercial banks are banks that
deal with the normal bankish stuff-
loans and housing the money

**investment banks are banks that
people put their money into so
the bank can invest their money
and hopefully the customer can
earn some extra money So now people can sleep at night,
knowing their money is safe from
being lost. For almost 60 years after the Great Depression, the economy is, so to speak, at its best. Banks make money from two things:
people paying to store their money
in the bank, and banks collecting
interest off of loans. INTEREST Banks put interest on loans so that the bank can make money of of that loan. For example, if the bank asked for a 10% interest on a loan of $100, the bank would make an extra $10 and the customer owes the bank $110 to pay off the loan.But unfortunately or the customers, banks don't ask for 10% interest, they ask for a least a 20% interest. BANKS YOU BUT THE BANKS DECIDED TO FIGHT BACK The banks decided that they didn't want to work that way anymore, so they paid greedy politicians to disable the Glass Steagall, so that banks would be free to do what they wanted again. They didn't want to be limited. Banks thought that this would be better. But instead, the banks abused their responsibility and almost ruined the world.... again. In the Great Depression, the government
didn't bail the banks out, so it lasted for
years. But since North America came so
close to poverty, the government was
scared that it actually would happen
again, so this time the government gave
the banks millions of dollars so they
could get out of this mess. But now the
government is in debt, and it is all one
big mess. This is still a major problem.
It is still going on and we can't
see the end of it. The government
is in trillions of dollars of debt,
who's to say once this is resolved
it won't happen again? Its an endless
cycle unless someone puts a stop to it.
Who will fix this? To this day, the issue still hasn't been resolved. The government is in trillions of dollars of debt, and who's to say that once this issue is resolved, it won't happen again in 20,30 years? It is an endless cycle, unless someone can fix it. Who will that be? The current president or prime minister? The next ones? Ones twenty years from now? Who knows? We will just have to wait and see. THE END(FOR NOW)
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