Posted on 25 November 2009
Tags: Asian countries, central bank, China, dollar, Europe, Financial Times, interest rate, recovery, sales, US, world bank
The World Bank published a report today in The Financial Times, saying that rapid interest rate increases aimed at surrounding inflation in product and asset prices, could give way to another recession in US and European countries, as their economies are recovering quite slowly.
The World Bank President, Robert Zoellick, said in the report that waiting for bubbles to burst and then cleaning up the aftermath is now a new lesson of what not to do.
According to him, the interest rates, tightened too much could lead to another downturn, especially in the case of countries that are showing weak recovery signs.
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Posted on 14 July 2009
Tags: agricultural products, Asia, Asian Financial Crisis, bank, Bank Accounts, bank deposits, bank savings, bank shares, Bert Ely, BFM FHLMC Mortgsecurities Fund, Brazil, British government, Business_Finance, central bank, Central Banking Corp., Chairman, Channel Islands, China, congress, Dow 30, Dutch government, Economic history of the United States, economics, Emergency Economic Stabilization Act, Enron, Enron Creditors Recovery Corp., Europe, Fannie Mae, Federal Government, Federal Reserve System, Financial crises, freddie Mac, GBP, Great Britain, Inc., Indonesia, industrial infrastructure, insurance fund, International Monetary Fund, Internet startups, Japan, JP Morgan, JPMorgan Chase & Co, Latin America, Martin Upton, MCI, MCI Worldcom, Mexico, Microsoft, Microsoft Corporation, Netherlands, Northern Rock, Northern Rock Plc, oil, oil prices, Real Estate, real estate prices, real estate values, Russian government, senior management, social and municipal services, South Korea, speculative real estate bubble, Stock market crashes, Stock Markets, supervision agencies, Sweden, Thailand, Thailand’s government, The Bank of England, The Netherlands, the United States, Tokyo, Tripartite Authority, Turkey, united states, United States housing bubble
If we look into history of different countries we will find that different countries faced the financial crises at different times. As the world is facing now financial crisis now also, the question comes in mind that who are those who run this finance horse, what are the reasons which leads to financial crises? Or is there is someone who is holding all the strings and keep them pulling? So many questions come in mind when mind starts thinking about it.
Well I had searched about this and compiled these ten nasty crises. Check out these ten dramatic crises.
1 – Argentine economic crisis (1999 – 2002)
Argentinean economy was destabilized in 1980s when Latin American Crisis struck it. Argentine was an import dependent country where people usually convert their peso into dollars to feel secure. The high inflation rate leads its currency to lose the confidence and adding oil to fire the government that time spent generously on itself while ignoring the country’s crumbling industrial infrastructure.
Mexico and Brazil were the major trade partners of the Argentine in 1980s both countries suffered the economic crises which spread out in Latin America. Brazil’s currency was devalued in 1999 that damaged a lot Argentinean exports and adding fuel to fire the dollar was revalued giving a harsh blow to Argentinean Peso.
Till 1999 the country was having 3rd consistent year of economic decline but the government haven’t devalued the peso, which made the crisis worse. In such conditions the investors ran on banks for dollars to send abroad for safety. Meanwhile the government freezes everyone’s bank accounts. This step of the government raised violence amongst citizens and protests through out country were started. The government was collapsed in 2001. While in crisis the people were bartering for goods because lack of cash, many people eked out a living by scavenging cardboard for recycling plants.
The new government 1st tried to setup a third currency between dollar and peso but that failed. Then it instructed the banks to convert all dollars into pesos. That step worked and peso was lead to diminish in value. Because of that exports got higher and in meanwhile the government tightened its tax policies, improves social welfare, encourages business growth and put the reserve dollars up for sale in market. The country got the surplus trade because of its agricultural products anyhow its still struggling with inflation.
Lesson
Freezing bank accounts leads the crises to get worst. It can’t be a smart step to tackle the crisis.
2 – Russian Financial Crisis (1998)
The Russian government in 1993 introduced inflation-free short-term treasury bills known as GKOs to finance the country’s deficit. GKOs were traded on currency exchanges. Most of it was state owning while only 1/3 of funding came from foreign speculators who were attracted by high interest rates. Like a classic Ponzi scheme the government used proceeds from sales of new GKOs to payoff interest on matured bills.
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Posted on 30 January 2009
Tags: 42nd President, Abbi Cohen, AIG, Alan Greenspan, America, american, American International Group, analyst, Andrew Lada, author, bank, Banks, Bark up the wrong tree, Ben Bernanke, Bill Clinton, Bill Gates, Britain, California, Case Study, crisis, derivatives, Doom, Europe, Federal Reserve System, Finance, financial, financial crisis, financial markets, founder, Franklin, Geir Haarde, George Soros, George W Bush, Goldman Sachs, Goldman Sachs Bank USA, Gordon Brown, greed of Businessmen, Guardian, Hank Greenberg, head, Henry Paulson, Iceland, idiots gave opportunity, idiots who gave me the opportunity to become rich, influential financier, investment, investment banks, John Paulson, Kathleen Corbet, Lehman Brothers, Lewis Raneri, market, Meredith Whitney, Minister of Finance, New York University, North America, Nuriel Rubin, people, political short-sightedness, President, Prime Minister, Professor, Richard Fuld, S&P 500, Sleeping over the Crisis, Standard & Poor's, Steve Jobs, strategist, the Guardian, U.S. Federal Reserve, U.S. Treasury, United Kingdom, United Socialist States of America, united states, United States Congress, United States of America, Wall Street, Warren Buffett, world
Guardian in a recent report revealed the perpetrators of the global financial crisis. It revealed their names and photos too. The British Guardian newspaper on Monday published a list of people whose work has proved fatal for the world economy. Lies have been told by both policy makers and business sharks.
The publication also listed visionaries who, warned us long before the actual crisis hit our shores. Unfortunately for the all us, these people were not involved in the process of decision-making.
In its famous “black list” Guardian has 25 spots. Almost half of them are filled with the people that have something to do with economic crisis of today. here are some of political and financial heavy weights.
Bark up the wrong tree “guru”
Alan Greenspan, head of the U.S. Federal Reserve( 1987 to 2006), is on the list at number one. The most influential financier has received from fans the world title of “guru”, “oracle” and “maestro”. In the delight of observers led his calmness with which Greenspan has held America through crises of 1987 and 1991, as well as the collapse of IT-industry in 2000 and panic in the markets that followed the September 11, 2001. It was Greenspan in early 2000 pursued a policy of low rates of the Fed, which led to easy money and irresponsible distribution of loans by banks. Moreover, the head of the Fed encouraged mortgage borrowers to take loans with floating rates. When rates inevitably increased after the tightening of fiscal policy in the middle of this decade, the people proved to have nothing to pay sharply increased the cost of credit.
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