The Great Depression hit world's economy at the beginning of the 20th century and is known to be the most serious crisis humanity has ever experienced. Its causes began to be visible after the First World War, and developed during the next 10 years, period during which the world economy was severely affected. In order to avoid future economic recessions, one must understand the causes and events of this time of unrest.
The Great Depression started in the United States in the 1920s. It is the crash of the stock market in new York, on the 29th of October 1929, also known as the Black Tuesday, which marked the beginning of the crisis. The recession began to be felt ever since the early 20s, after World War I finished. The cost of the war was three times larger than tax collections and when government cut spending, the whole economy was affected. So the main causes of this event were over-indebtedness and deflation, with which governments all over the world hardly dealt, despite all the measures taken. The interest rates were also cut, and numerous countries raised the tariffs on imported goods in order to protect the national industries.
The crisis became hardly controllable and consequently, many banks, small firms and factories were closed. People were left without jobs and houses and living turned out to be more and more difficult. Investors were also affected: they lost a lot of money and the GNP severely fell. New types of governments occurred: it is the time when Adolf Hitler's power increased and many conflicts arouse. One of them is between China and Japan, which decided to invade the first in order to open mines in Manchuria and develop its industry. It seemed to be a dead end situation, which eventually led to the II World War.
The recession was brought to a halt during the term of Franklin Roosevelt, but recent economic events showed that modern societies are still sensitive. So what to do in order to avoid another crisis? One solution is to adhere to Gold Standard and start investing in gold.
Franklin Roosevelt managed in the US to reduce the effects of the Great Depression, but the recent economic crisis proved that we are still sensitive and vulnerable. In order to avoid future economic recessions, or times of upheaval, many investors prefer investing in gold rather than currencies, for gold is a safer and more stable currency, which is hardly affected by drops in the value of national currencies.





