What economic panic was caused by speculation and a decline in European demand for American goods?

The Panic of 1819 was primarily caused by a combination of speculative investments and a significant decline in European demand for American goods, particularly after the end of the Napoleonic Wars. Following the war, the United States experienced an economic boom fueled by agricultural expansion and the growth of markets, leading many investors to speculate excessively in land. When European markets contracted and demand for American exports fell, it resulted in a dramatic decline in prices. This unforeseen downturn caused widespread financial distress, bank failures, and economic instability, marking the first major financial crisis in the United States. The panic led to a recession that drastically affected many sectors, reflecting the vulnerabilities in the American economy due to over-reliance on speculation and international trade dynamics. This historical context highlights the importance of recognizing how speculative behavior and external market forces can intertwine to create significant economic challenges.