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 3^rd 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 1^st 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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Existing home sales in the 12-state region fall to 18 percent from February last year as doubts about the economic conditions and firm credit requirements prevent potential buyers, according to two reports released on Monday.

The median price in the Midwest declined 8 percent to $131,000 which is the second-smallest drop of any region.

By contrast, nationwide home sales slipped 10 percent from a year ago, without adjusting for seasonal factors, while prices tumbled almost 16 percent to $165,400.

Home sales fell in 11 of 12 major Midwestern cities with seven of those plummeting by more than 20 percent from prior-year levels the survey includes all home sales recorded in the metropolitan statistical area by all local agents, regardless of company affiliation.

Chicago; Wichita, Kan.; Indianapolis; Des Moines, Iowa; and Kansas City, Mo., face the biggest losses in the region, dropping by 25 percent or more.

Overall sales increased 5 percent in February while the median sale price fell 50 percent which is considered to be the biggest drop in the country to $41,000.

Home sales in Chicago plummeted by 65 percent in February from a year ago, one of the worst showings in the nation. The median home sale price has also fallen, declining 23 percent to $179,000.

A real estate agent said that buyers who would normally have taken advantage of lower home prices are now staying out of the market, afraid that prices will continue to fall. He said the problem has only worsened as more homes are taken into possession or are being sold short that is for less than the balance on the mortgage.

Those stressed sales make it virtually impossible for regular sellers to put their properties on the market for good prices, even in higher-valued neighborhoods, he said.

Every part of state has been affected. Properties that were sold for $410,000 a year ago now go for $120,000.

Sales in the Indianapolis market slid to 29 percent in February while the median sale price fell 15 percent to $93,900.

One of the reasons is that lenders have increased their requirements for mortgages, forcing potential buyers to provide more documentation on income and other financial factors.

Home sales in Fargo slid to 25 percent in February compared with a year ago, but the median sale price has remained relatively controlled,declining only about 2 percent to $139,900.

One of the agents said the economic troubles affecting much of the country have scared away some potential buyers.

Another agent said the market for first-time home buyers has been a bright spot, especially after the federal government began offering an $8,000 tax credit to first-time buyers as part of the new economic encouragement plan.