Why did the great depression, which begain in the united states, spread through much of the world?

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  • Prince
    Lv 6
    8 months ago

    That was how Armand Hammer had engineered it. That was what made the Thirties such a great time for Rich People. You could buy ten times the diamonds you could have a decade before, for the same money. You could employ the Poor at cut-throat wages. Your money went further than it ever had in world history. That's why the Depression was such fun. 

  • Ludwig
    Lv 7
    8 months ago

    It didn't exactly.   The American depression (in the opinion of some economic theorists) was a direct result of the actions of the Bank of England.  The problems the UK experienced (the 1926 General Strike for example,) were not closely connected,  and the problems in continental Europe (Bavaria etc. ) were different again, and mostly the result of rapid deflation ( not, as is commonly stated the wild inflation of the Weimar period).

  • 8 months ago

    The Depression did not "begin" in the United States. It was a world-wide phenomenon which was far worse in many other countries.

  • 8 months ago

    Modern economies, in which trade is an important component, are very inter-connected.

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  • 8 months ago

    There was already an international banking system. Nothing like now, but US banks made loans to business and industry in Europe, and to a lesser extent, European lenders had interests in the US. There was already a high level of international trade.

    When the US economy began to take a hit from people being afraid to spend money, economies in Europe, and to a lesser extent, South America and Asia, were negatively impacted. Businesses that relied on US financing suffered from lines of credit being cut off or outright calling in loans as immediately payable. Many businesses collapsed almost immediately. The saying, 'When America sneezes, the rest of the world catches a cold,' was indicative of the influence the US economy had on the rest of the world.

    Germany, which relied heavily on loans and investments from US banks to help them recover from the steep penalties of war reparations dictated by the Treaty of Versailles after WW I, was hot especially hard, and this is now pointed to as a main instigator of Hitler's rise to power. In the second half of the 1920s, Hitler was preaching about the dangers of relying on foreign (Jewish) bankers, and was mostly ignored. When things started going south, his warnings found a willing and ready audience.

  • Anonymous
    8 months ago

    The US was the biggest economy in the world and New York was the financial hub, having replaced London.  So when the American economy got sick, it spread throughout the world.

  • 8 months ago

    Most of world trade is based on the US dollar.

    While the affected countries were trying to dig themselves out of the Depression in the 1930s, Roosevelt was busy robbing them of their gold under the guise of "keeping it away from the Nazis".

  • 8 months ago

    There are a myriad of books written on the subject, with just as many differing opinions. Why don't you read the reference material you were given in class and just write out the answer the teacher is hoping you will give? That way you can get an "A" in the class and move forward through life ignorant of the subject.

    Here's my opinion. The reason The Great Depression affected the whole world is because the world had already started to become a "world economy". The United States has the highest concentration of natural resources of any other country. So, other countries had grown accustomed to relying on us as a resource. When our economy became damaged, the rest of the world lost a source of goods and revenue they had grown to rely on.

    That's as long of an answer I'm going to invest time into. I could write on the subject for the rest of my life and never cover all of the context and issues.

  • 8 months ago

     The global adherence to the gold standard, which joined countries around the world in a fixed currency exchange, helped spread economic woes from the United States throughout the world, especially Europe.

  • Anonymous
    8 months ago

    Because capitalism fails. 

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