Student Question
How was gambling related to the Great Depression?
Quick answer:
Gambling was related to the Great Depression through speculative investing in the stock market, rather than traditional casino gambling. In the 1920s, many Americans "gambled" by borrowing money to buy stocks, assuming prices would always rise. This speculative behavior led to inflated stock prices, which eventually crashed and triggered the Great Depression. Thus, the "gambling" involved was more about risky financial speculation than actual gambling in casinos.
Gambling in the sense of going to a casino had nothing to do with the Great Depression. However, one of the causes of the Depression was what you might call gambling with regard to the stock market.
In the 1920s, Americans thought that stock prices would go up forever. So they did things like borrowing money to buy stocks. This can be seen as a form of gambling. It was not that people were carefully deciding which stocks to buy. Instead, they were just buying and hoping/assuming prices would rise. This gambling created excessively high stock prices which then crashed, starting the Depression.
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