According to the historians, what triggered the fall of the stock market were these nine factors interacting with each other under debt conditions (Obligation that a person has to pay or return a thing, usually money), and deflation (Situation of excess supply that can cause a generalized decrease in prices or an economic recession), to create the mechanics of boom and bust.
The chain of events proceeded as shown below:
1.- Liquidation of debt and forced sales.
2.- Reduction in the money supply because the bank debts were liquidated.
3.- A fall in asset price levels.
4.- An even greater fall in the total value of companies, precipitating bankruptcies.
5.- A fall in profits.
6.- A reduction in production, trade and employment.
7.- Pessimism and loss of confidence.
8.- Accumulation of money.
9.- A fall in nominal interest rates and a rise in interest rates adjusted for deflation.
