The financial crisis, also known as the financial storm, refers to the sharp, short-term and super-cycle deterioration of all or most financial indicators of a country or several countries and regions (such as short-term interest rates, monetary assets, securities, real estate, land (price), the number of commercial bankruptcies and the number of financial institution failures).
Its characteristic is that people's expectations of the future economy are more pessimistic, the currency of the whole region has depreciated sharply, and the economic aggregate and scale have lost a lot, which has hit economic growth. It is often accompanied by a large number of business failures, rising unemployment rate, general economic depression in society, and sometimes even social unrest or national political turmoil.
Before the American economic crisis, driven by the false prosperity of the real estate market, there was excessive speculation in real estate transactions in the United States.
This phenomenon can be described by an analogy that we can easily understand:
It is said that we all speculate in stocks to make money, but it is not enough to invest all our money. We still want to borrow money to make money, so we mortgage our own stocks and continue to buy stocks, and some banks even give you financing without your mortgage.
This has accumulated a lot of risks.
One day, the crazy stock market fever showed signs of fading, and the stock also fell. Many people cut their meat and leave because they can't pay back their loans, and many people take mortgaged properties because they can't pay back their money. Many banks have to admit compensation when lenders can't repay their debts because they don't have enough collateral. Chain reaction, personal bankruptcy, bankruptcy of credit institutions, economic depression, inflation.
The American government hopes to curb excessive investment, reduce the scale of credit, and control the pushed up prices, so it has adopted a policy of tightening monetary policy, including raising interest rates, raising bank deposit reserves, and issuing bills to absorb money market funds.
American managers are a group of politicians. They really dare not compliment their ability to manage the national economy. They have no idea about the patients in their own country. The rapid and sustained policy of raising interest rates is actually the fuse of this crisis. This measure led to a large number of loans that could not be repaid, which triggered a chain of bad debts and led to the domino collapse of many financial companies in the United States.
Because all financial institutions in the world will not just put money there, they will only put some loans, not all of them, and they can't even put them out if they want to. In addition, they need to "diversify their investments", so they always invest in each other among financial institutions in various countries. US Treasury bonds, corporate bonds, stocks and real estate are the investment targets of financial institutions in various countries. Once there is a crisis in the United States, all foreign investors will suffer, and it will sweep the world.
Talk about price.
At the beginning of the financial crisis, all the prices fell. That was the initial appearance, and that was everyone desperately cashing out.
For example, if people don't want to buy milk, dairy merchants will sell it at a low price, or even pour the rest into the sewer, kill all the cows and sell meat.
In the current economic crisis, there is a phenomenon in the initial performance. It is said that the inflation rate was high during the economic crisis, but now everything is falling. In fact, this is a necessary process. Now everyone is cashing in and selling goods and securities for cash, so as to avoid being passive because of insufficient cash in the future.
After cashing out, the crisis entered the most serious stage. After capital flight, factories closed, workers lost their jobs, and consumption power declined ... This vicious circle caused the overall economic depression. Naturally, the people are greatly affected, commodities are scarce, prices are soaring, and people without food are everywhere.
Finally, one question is very interesting. Someone asked me, "Are there any beneficiaries of this financial crisis?" ?
Hehe, this question hit the nail on the head, by the way ~
The biggest beneficiary of this financial crisis is precisely the United States!
Let's look at the benefits of the crisis:
1. The US government is now under the administration of George W. Bush, a Republican Party, and will soon step down, and Obama, a Democratic Party, will soon take office. When George W. Bush came to power, the Clinton administration left a fiscal surplus of US$ 6,543.8+US$ 046.8 billion, while George W. Bush turned the fiscal revenue and expenditure into a deficit of US$ 400 billion in just two years, and has maintained the deficit every year since then. By the last fiscal year of next year's term, the deficit is estimated to be as high as $490 billion. This is a trap for Obama, a rookie in politics. The bet is that once Obama takes office, this term will not go on, and the next term will not be ousted by the Republican Party, or even die halfway. In addition, if the current bailout in the United States is effective, it may even be beneficial to the Republican presidential candidate and reverse the election in one fell swoop.
2. The economic strength of the United States is mainly reflected in the developed financial industry. Wall Street is the financial center of the world, and the US dollar is the benchmark of the world economy and the unified trade settlement currency in the world. On the other hand, American industry shows signs of recession and needs to be revitalized, which requires a lower exchange rate level to facilitate export competition. In recent years, due to over-investment in the United States, the government has passively raised interest rates, and high interest rates are not conducive to the depreciation of the US dollar. It should be noted here that the United States is not afraid of the depreciation of the dollar, but hopes that it will depreciate moderately. How do we lower the exchange rate? Direct interest rate cuts? It does not conform to the macro environment of controlling excessive investment. Forcing the yen and the renminbi to appreciate again? Not sure. Euro won't listen to him. then what George W. Bush came up with a more unique trick: raising interest rates. In two years, the interest rate was raised 17 times, from 1% to 5.25%, which pushed mortgage institutions, real estate credit companies and banks to the brink and created a financial crisis. America's financial industry is the most developed in the world, and Wall Street leads the world. If a financial crisis breaks out in the United States, the exchange rate will naturally fall, and the United States will not worry about its own life, because the whole world will help the United States to pass the customs in order to prevent its own dollar from becoming like waste paper. Even if the world can't help much, the United States can survive with deficit policy and printing money to save the market.
3. Have you seen the American TV series Prison Break? "Company" controls the government and political economy of other countries, because "company partners" can make huge profits from it. Then, how much the richest American financial giants in the world can profit from an economic crisis is an astronomical figure that we can't guess. Who can say that American financial giants are not secretly happy with George W. Bush?