Books: The Great Crash of 1929 by John Kenneth Galbraith

Historical record of the time leading up to the great crash of 1929 and the immediate aftermath.

What caused it according to Galbraith:

  • Skewed distribution of income, where the top 5% got 30% of the income.
  • Bad banking practices, that would work out well if the growth would continue.
  • Unsound corporate structures, which allowed companies to amass huge amounts of debt with little equity contributions by the shareholders.
  • Poor US foreign balance. US at the time was the largest creditor nation and was imposing restrictions on trade.
  • Poor economic intelligence of the retail investor, misuse of leverage etc.

Sounds familiar?

A man once said that history does not repeat itself but it rhymes.

Personal score: 6/10

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