History’s Worst Financial Crashes

The economy is never totally stable and tends to fluctuate between periods of highs and lows, every now and then. However, there are times when things hit rock bottom, and it’s in these moments that a nation declares themselves to be in a financial crisis where everything is seemingly falling apart and people and the government alike are struggling to stay afloat. Going all the way back to the 1700s, here are a couple of the worst financial crises we’ve seen so far.\r \r 1. The Great Depression\r \r Up first is the Great Depression which was the result of the stock market crashing on October 1929, sending Wall Street into a panic and rendering millions of investors nearly penniless. In just one night, millions of families found themselves suddenly homeless and unable to feed themselves. Consumer and investment continued to drop even more over the next couple years, and by 1933, at the lowest point of the Great Depression, nearly half of the country’s banks were in shambles and some 15 million Americans were out of work.\r \r 2. The 2008 Financial Crash\r \r Even though there were a few crashes since the Great Depression, none were quite as bad as the 2008 Global Financial Crisis, which affected everyone on a global scale, not just the United States. Excessive risk-taking by global financial institutions and predatory lending targeting low-income homebuyers were some of the things that led to trillions of dollars being wiped all across the world in just a single night. It was so bad that many businesses were forced to declare bankruptcy, such as the Lehman Brothers on September 15, 2008.\r \r 3. The Late ’80s Housing Crash\r \r Though not quite on the scale of the above listed financial crisis, the housing crash of the late 80s saw the real estate industry get destroyed under the crushing weight of 17-18% mortgage rates. Within only a few hours, billions of dollars were wiped out of the global supply, with a stock market loss of 22.61%. By 1982, there was a 50% drop in home sales of the 4 million existing home sales in 1978. Lots of businesses suffered their fair share of losses as well.  \r \r 4. The OPEC Oil Price Shock Of 1973 \r \r The Middle East is the source of the majority of the world’s oil supply. So you could imagine what happened when the Middle Eastern oil producing countries, or OPEC as they’re known, decided to punish the countries that allied with Israel in the war. The effects of their actions were felt immediately: the Western world was plunged into a mini recession, causing inflation to shoot up to a staggering rate. The recession forced many countries to look elsewhere for a reliable supply of oil, as well as the fall of the Tory government in the UK’s 1984 elections.\r \r 5. The Tulip Crash Of 1637\r \r By far, one of the earliest and most dire economic crises has to be the tulip crash of 1637, where the Dutch started buying and selling tulips from Turkey as valuable assets due to its unique appearance. The flowers were initially restricted to only the elites, but things quickly spiraled out of control once the general public caught on to the craze, leading to people mortgaging their homes in order to purchase the exotic flower in an attempt to sell them at an even higher price. Such outrageous actions led to the tulips losing their value almost overnight, and a financial crash that forced many middle-class families into spending much of their savings in the following years.