The Great Depression

In my opinion the lack of diversification was the most important cause of the Great Depression. Lack of diversification was due to the American economy, in the 1920s, mainly consisting of two elements; construction and automobiles. Therefore when both industries started to decline, probably because people didnt need to buy a house or build a car if they already had one, in the late 1920s, the other industries were not able to compensate for the tremendous loss causing a great decline in money and especially stocks.Many people had money into construction and automobile industries because they were producing the most money and they were supposdely the most stable.
With the stock market boom during 1928-1929, right before "black Tuesday", most people had their hard earned money invested. Bankers were encouraging buyers to spend recklessly into the stock market, however once the to main industries started failing and people lost money the stock market started failing also. People began taking out money that wasent there and trying to invest into the other industries, however, these industries ( petroleum, chemicals, plastics, and others oriented towards consumers) were not able to pick up the slack. What soon followed was the Great Depression, and it was caused heavily on the lack of diversification.