Stock Market Crash of 1973-1974

Whereas other recessions were primarily a result of equity-related problems, the 1973-1974 slowdown was almost entirely a result of the energy crisis that caused oil prices to skyrocket. The rise in crude prices coupled with considerable fiscal spending associated with the Vietnam War would lead to a prolonged period of stagflation.

Other factors contributing to the 1973 stock market crash include shock of transitioning to the Bretton Woods system, where cash could not be converted into gold, and a significant devaluation of the U.S. dollar.

Supply-side inflation shocks to the global economy remain the primary cause for the Dow's 45% decline during 1973 and 1974.

In subsequent years, the energy crisis emerged as a larger concern than the decline in equity prices. Fears of unabated inflation, based on rising demand for petroleum in concordance with limited supply, have been a persistent concern of global economies, especially as developing nations with large populations begin to demand more and more sources of non-renewable energy.

Stock Market Crash of 1973-1974 - Article By Better Trades