Panic of 1819
Definition
The Panic of 1819 was the first major financial crisis in United States history. It featured widespread foreclosures, bank failures, unemployment, and a slump in agriculture and manufacturing.
Analogy
Imagine if your favorite video game suddenly crashed without any warning while you were on your highest score ever. You'd be shocked, upset, maybe even panicked because you didn't see it coming. That's how Americans felt during the Panic of 1819 when their economy unexpectedly crashed.
Related terms
Speculation: Investment in stocks or property with an expectation for profit but also with risk for loss due to market fluctuations.
Second Bank of United States (BUS): Chartered five years before the panic; its restrictive lending policies contributed to economic instability leading up to this event.
Deflation: Reductions in general price levels for goods or services often associated with contraction in the supply of money and credit.
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