During the Depression foreclosure rates skyrocketed. What was the main cause?

The US entered a depression in 1929, which was followed by a stock market crash. Yet, there was something special, something brewing; the Federal Reserve system was established following the great market crash of 1907, another one, but one that had a lasting impact on the course of events because, in contrast to all the previous market collapses, this one was prevented by J.P. Morgan, who merely loaned to the country and saved the day. Washington, DC, had problems with this.

In the public's eyes, the government had gone fishing that day, and six years later, they were prepared for the next crash of 1907. What they failed to grasp was the impact of stocks, or more accurately, the sudden and drastic adoption of a new theory about stock investing that said that one could invest in stocks. This was new to the world of investors who only knew the B word, bonds. Stock trading reflects valuation, but mostly hope.

The definition of stock value was defined as the present value of all discounted future earnings. Currently, stocks are great if you don't need them right now, but if you do, their value lies in their liquidity—the speed at which a paper certificate can be converted into actual money—which is all known. However, if you look at a dollar bill, you'll see that it contains more words than gold, so you're back to square one. If you believe what you read, that the government will keep its word, then it's back to square zero.

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