Continued from Part 1 here.
To understand what led to the crash, we have to unwind one decade before the onset of the 1929 crisis. In 1919, US emerged victorious from world war one. A mood of optimism is in the air. American confidence in the economy fly so high that they feel that good times will last forever! Optimism and greed quickly led to unrealistic spending and wild stock speculations, in spite of declining foreign demand from the post-war period when Europe rebuilt their economies with local production of consumer goods. Stock crashed in Oct 1929 which marks the beginning of the biggest economic collapse in the 20th century.
WORLD WAR 1 -> US GETTING RICHER -> OPTIMISM
World war one took place from Jul 1914 – Nov 1918, where the allies led by Britain were fighting against the Central powers led by Germany. The epic centre of the war was Europe.