Lesser-known facts about the father of modern science
The British credit crisis of 1772 has been described by scholars and economists as the first modern banking crisis involving the Bank of England. The trouble began when banker Alexander Fordyce, who found himself in enormous debt, fled from his financial responsibilities to France.
As word of the affluent banker's flight spread throughout England, panic erupted, and as people scrambled to get their cash out of banks that didn't have the liquid funds, nearly 30 banks in England and across continental Europe collapsed.
The total failure of the federal government to provide relief or a plan of action perpetuated this decade of starvation, homelessness, economic stagnation, and the worst period of unemployment in American history. At the depression's peak, unemployment reached almost 25%. In 1933 alone, 4,000 banks were forced to close their doors.
The gas crisis that coincided with the Fourth Arab-Israeli War was caused by a game of warmongering and embargoes between Western countries who supported Israel financially and militarily, and the oil-producing Arab states who sanctioned these Western nations as a show of solidarity with the Arab coalition headed by Syria and Egypt.
Caused by the collapse of the United States' housing market, some of the largest and strongest financial institutions in the world, who had been profiting for years off of loans they knew to be fragile, found themselves on the brink of collapse, and nearly 10 million Americans lost their homes along with billions of dollars of income.
Considered the worst financial crisis in modern history, the Great Depression that practically destroyed a generation of Americans began with the Wall Street market crash of 1929.
Wartime economic stimulation in the United States ceased after Napoleon won the French Revolutionary War. This alone put the US economy in a precarious position, and with the added interference of Barbary pirates (Muslim pirates who operated from North Africa), the States slipped into a recession that led to the instigation of the First Barbary War.
Arab nations cut oil supplies to Israel's Western allies, causing an immediate and catastrophic oil shortage and a massive spike in gas prices across the Global West.
The United States' switch to a paper money economy was spurred by the Copper Panic of 1789, during which massive quantities of fake copper coins made their way into circulation, destroying the value of real copper and causing the American public to lose faith in the copper coin.
In the months preceding the War of 1812, the United States experienced a brief but serious recession. Fortunately for the economy, the boost in production to feed the war machine quickly pulled the economy out of danger.
What followed the panic was a six-year-long depression, which at the time was labeled the Great Depression. After the depression of the 1930s commandeered that title, the depression of 1873-79 became known as the Long Depression.
Scotsman Gregor MacGregor pulled off a spectacular scam in 1825 that worked so well it caused a minor recession. MacGregor made thousands by convincing people to invest in and buy land grants for an idyllic Central American country called Poyais that, in reality, never existed.
The recession that followed would last more than a year and was a main precursor to the formation of the Federal Reserve in 1913.
The end of World War I left the United States deeply in debt, and with a dramatic decrease in domestic production. Prices dropped 37% in 1920, while the GDP for that year dropped 38%, making it one of the worst financial years in United States history.
Depressions like this are to be expected when shifting from the heightened production of wartime to the scaled-down, less profitable production of peacetime, but the end of World War I struck particularly hard. Thankfully, consumerism quickly reached new heights following the 1920 depression, and the Roaring Twenties were soon in full swing.
While the New Deal itself pulled the United States out of its previous recession, it left gaps in the federal budget that displeased Congress and led them to introduce wide-reaching austerity measures that sent the public and the trading markets into a panic.
Just six years after the gas crisis of 1973, another energy crisis hit in the months following the end of the Iranian Revolution. The new Iranian government in place was swift to change their oil export policies.
One of the worst recessions of the 1900s, the Recession of 1937 is commonly referred to as the Roosevelt Recession, as it was caused in part by Franklin D. Roosevelt's New Deal policies.
The Panic of 1907 was a brief but intense economic crisis that saw numerous institutions around the world close their doors in a matter of weeks.
The "Lost Decade" of the 1980s was an international debt crisis that plagued numerous Latin American countries. Inflation and extortionate interest rates on debt borrowed from international creditors and investors led countries such as Brazil and Mexico to find themselves in a massive deficit year after year, with their annual debt payments totaling more than their GDP.
An already shaky Argentine economy was pushed over the edge after the economic collapses in Brazil, Mexico, and Russia, all important trading partners for Argentina.
Similar to the crisis of 1973, the United States' dependency on foreign oil became its downfall. The new Iranian government drastically cut the volume and frequency of its oil exports, causing price hikes and shortages in the United States as well as other Western countries.
The collapse of the Argentine economy led to some of the worst years of poverty the country had ever seen. At the height of the depression, the Argentine unemployment rate was nearly 20%, and some estimates suggest more than 50% of Argentinians were pushed below the poverty line.
In the wake of the 2008 global market crash, Greece continued to suffer more than other European nations. By 2009, Greece was buried in debt borrowed from other European countries, causing an economic and social crisis the effects of which can still be felt.
Sources: (Stacker) (Insider)
See also: Essential financial guidelines everyone should know
In a time when investors looked to the British stock market to invest in foreign debt, MacGregor had no problem putting his fake government bonds on the market. When his duplicity was exposed, it caused a huge panic in the financial sector of Great Britain and caused the public to second guess their investments after seeing so many of their neighbors lose their life's savings to MacGregor 's scam.
The panic and following recession of 1837 was spurred on by a litany of failures and mistakes within the American government and banking system. In a time of rapid westward expansion and privatization of natural resources, land speculations were going bust left and right; cotton prices plummeted, leaving the Southern slavery-driven economy in shambles; and the public was quickly losing confidence in the American banking system, causing droves of people to withdraw all of their savings.
A recession that began in 1882 caused by the decline of the railroad industry came to a head after the collapse of two of the United States' primary banking institutions, Marine National Bank and the Grant & Ward firm. The New York Clearing House gave other banks on the brink of failure massive bailouts to avoid further financial catastrophe.
The Panic of 1873 was caused by the closure of Jay Cooke & Co., the largest financial institution in the United States at the time, which had poured too much money into the construction of the Northern Pacific Railway without seeing any returns.
For as long as there has been a market, there have been market failures. Whether caused by the beginnings of wars, the ends of wars, bad loans, or just the natural progression of things, they have always found a way to occur, and show no sign of being eradicated anytime soon. Some recessions are brief and inconsequential enough that they can be struck from public memory within a matter of years, while others, like the Great Depression or the market crash of 2008, have left indelible, permanent marks on cultures and societies around the world.
Read on to learn more about the worst financial collapses in history.
Major financial crises throughout history
Economic collapses that changed history
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For as long as there has been a market, there have been market failures. Whether caused by the beginnings of wars, the ends of wars, bad loans, or just the natural progression of things, they have always found a way to occur, and show no sign of being eradicated anytime soon. Some recessions are brief and inconsequential enough that they can be struck from public memory within a matter of years, while others, like the Great Depression or the market crash of 2008, have left indelible, permanent marks on cultures and societies around the world.
Read on to learn more about the worst financial collapses in history.