0 Members and 1 Guest are viewing this topic.
Good work Yummi, very nicely laid out post!
Generally speaking a falling dollar value can actually be good for our economy, it makes our products less expensive for foreign buyers. Unless we experience inflation we don't really feel it except that we have to pay China more for their products.
Effects of DevaluationA significant danger is that by increasing the price of imports and stimulating greater demand for domestic products, devaluation can aggravate inflation. If this happens, the government may have to raise interest rates to control inflation, but at the cost of slower economic growth.Another risk of devaluation is psychological. To the extent that devaluation is viewed as a sign of economic weakness, the creditworthiness of the nation may be jeopardized. Thus, devaluation may dampen investor confidence in the country's economy and hurt the country's ability to secure foreign investment.
Historians most often attribute the start of the Great Depression to the sudden and total collapse of US stock market prices on October 29th, 1929, known as Black Tuesday.[1] However, some dispute this conclusion, and see the stock crash as a symptom, rather than a cause of the Great Depression.[9][3] Even after the Wall Street Crash of 1929, optimism persisted for some time; John D. Rockefeller said that "These are days when many are discouraged. In the 93 years of my life, depressions have come and gone. Prosperity has always returned and will again."[10] The stock market turned upward in early 1930, returning to early 1929 levels by April, though still almost 30% below the peak of September 1929.[11] Together, government and business actually spent more in the first half of 1930 than in the corresponding period of the previous year. But consumers, many of whom had suffered severe losses in the stock market the previous year, cut back their expenditures by ten percent, and a severe drought ravaged the agricultural heartland of the USA beginning in the summer of 1930.By mid-1930, interest rates had dropped to low levels, but expected deflation and the reluctance of people to add new debt by borrowing, meant that consumer spending and investment were depressed.[12] In May 1930, automobile sales had declined to below the levels of 1928. Prices in general began to decline, but wages held steady in 1930; but then a deflationary spiral started in 1931. Conditions were worse in farming areas, where commodity prices plunged, and in mining and logging areas, where unemployment was high and there were few other jobs. The decline in the US economy was the factor that pulled down most other countries at first, then internal weaknesses or strengths in each country made conditions worse or better. Frantic attempts to shore up the economies of individual nations through protectionist policies, such as the 1930 U.S. Smoot-Hawley Tariff Act and retaliatory tariffs in other countries, exacerbated the collapse in global trade. By late in 1930, a steady decline set in which reached bottom by March 1933.
October 2008 Stock Market Crash Additional Resources * Stock Market History * Stock Market Crash of 1929 * Stock Market Crash of 1987 * Stock Market Crash of 2008Although history may state the actual market crash occurred on Monday, October 6, 2008, the market experienced eight consecutive trading days of negative movement starting on October 1, 2008. The table below shows the decline of the Dow Jones Industrial Average from October 1st through October 10th.Date DJIA Close Point Change % ChangeOctober 1, 2008 10,831.07 -19.59 -0.18%October 2, 2008 10,482.85 -348.22 -3.22%October 3, 2008 10,325.38 -157.47 -1.50%October 6, 2008 9,955.50 -369.88 -3.58%October 7, 2008 9,447.11 -508.39 -5.11%October 8, 2008 9,258.10 -189.01 -2.00%October 9, 2008 8,579.19 -678.91 -7.33%October 10, 2008 8,451.19 -128.00 -1.49%During these eight trading days, the DJIA would drop a total of 2,399.47 points or 22.11%. The market would rebound sharply on Monday October 13 and rise 936.42 points only to drop 733.08 points on Wednesday of that same week.
Dow Jones Industrial Average for 10/28/1929 and 10/29/1929[18] date change % change closeOctober 28, 1929 -38.33 -12.82 260.64October 29, 1929 -30.57 -11.73 230.07
