The Great Depression began in 1929, when the stock market in the United States dropped rapidly. Thousands of investors lost all of their money and were forced to live on the streets. The following period of 10 years ranked as the worst period of high unemployment and low business activity in modern times. Banks, stores, and factories were closed and left millions of Americans jobless, homeless, and without food. Many people came to depend on the government or charity in order to survive. A prime example that led to this tragedy is the Federal Reserve's decision to raise interest rates in 1928 and 1929. This action slowed economic activity in the United States. Because the international gold standard linked interest rates and financial policies among participating nations, these actions triggered recessions in nations around the globe. The government repeated this mistake when responding to the international financial crisis in the fall of 1931. An example is the Federal Reserve's failure to act as a lender of last resort during the banking panics that began in the fall of 1930 and ended with the banking holiday in the winter of 1933, this led to millions of investors to go bankrupt and force themselves into poverty and famine in some cases. The prices of stocks in the stock market were soaring, rising as high as 40%. In the autumn of 1929, October 29th to be more exact, "Black Tuesday,"" after a week of steadily rising instability, all efforts to save the market failed. Up to sixteen million shares of stock were traded, stocks in many countries became virtually worthless within a month those stocks had lost half their value, but despite several comebacks they continued to decline for several years. Many of the American people were depending on whether their shares would actually bring them some money not take it all away.
Although it originated in the United States, the Great Depression caused drastic declines in production, severe unemployment, and heightened deflation in almost every country of the world.