In contrast to accepted opinion and just what almost all of media is feeding the world’s citizenry, the worldwide (financial) economic crisis didn’t arrive as a surprising phenomenon, which besets many, if not just about all, the nations throughout all the planet nowadays. The financial turmoil also has hit everyone! Most people today tend to be looking for techniques in order to make a bit of added funds in order to make it through. Will this problem going to last just for an additional month, a several years or perhaps decade? Just how long until all of us experience a new bank collapse?
The economic crisis of the U.S. and certain parts of the world – namely Europe – has matured from a preschooler to now entering it’s teen years. With 12 years of the economic crisis behind us and more potential ahead, there is less need for predicting the effect, instead focusing on assessing the harm already done. It is very likely these trends may bring on the subject of the economic collapse.
In January 2011 The US Financial Crisis Inquiry Commission created to investigate the Global Financial Crisis released its report. Concluding that the crisis was avoidable and caused by: failures in financial regulations, the US Federal Reserve’s failure to stem the flow of toxic mortgages, financial institutions taking on to much debt, excessive borrowing and risk by consumers and Wall Street that put the financial system on a collision course. Key policy makers not prepared, lacking a full understanding of the financial system they were supposed to be overseeing and a significant amount of accountability and ethics violations at all levels.
The economic world for the West is very shaky indeed. In the United States you have the democrats and republicans seemingly hell bent on delivering mutually assured destruction with their “no compromise” stance on US treasury debt. In Europe the Greek crisis may appear to be over, but 8 banks have failed the stress test run by the EU to see if financial institutions can survive the economic collapse of a single member and Spain, Portugal, Italy, and Ireland are all looking increasing more vulnerable by the day.
The European sovereign debt crisis has resulted from a combination of complex factors, including the globalization of finance; easy credit conditions during the 20022008 period that encouraged high-risk lending and borrowing practices; international trade imbalances; real-estate bubbles that have since burst; slow economic growth in 2008 and thereafter; fiscal policy choices related to government revenues and expenses, particularly high entitlement spending, see welfare state; and approaches used by nations to bailout troubled banking industries and private bondholders, assuming private debt burdens or socializing losses.
One narrative describing the causes of the crisis begins with the significant increase in savings available for investment during the 20002007 period when the global pool of fixed income securities increased from approximately $36 trillion in 2000 to $70 trillion by 2007. This “Giant Pool of Money” increased as savings from high-growth developing nations entered global capital markets. Investors searching for higher yields than those offered by U.S. Treasury bonds sought alternatives globally. The temptation offered by such readily available savings overwhelmed the policy and regulatory control mechanisms in country after country as global fixed income investors searched for yield, generating bubble after bubble across the globe. While these bubbles have burst causing asset prices (e.g., housing and commercial property) to decline, the liabilities owed to global investors remain at full price, generating questions regarding the solvency of governments and their banking systems.
Make sure you qualify for Chapter 7 bankruptcy before you waste money on a consultation. Under the 2005 bankruptcy reforms, only people who make less than the median income for their state can file for Chapter 7 protection. If you happen to make more than that, you can still set up a Chapter 13 repayment plan. These types of topics lead a person to think about bank collapse, and what effects it will have.
If a storm were to hit today and wipe out all power and water sources, how would you survive? Many, particularly those in areas prone to fewer natural disasters, rarely consider an emergency preparedness strategy. If one is drawn up, however, it’s frequently inefficient, with canned goods and a few days’ worth of bottled water serving as basic components. Because, in the event of a large-scale disaster, help can take time to arrive, you are left to your own devices. In preparing for such extreme circumstances, thoroughly consider food in your strategy.
Either way, high debt levels alone may not explain the crisis. According to The Economist Intelligence Unit, the position of the euro area looked “no worse and in some respects, rather better than that of the US or the UK.” The budget deficit for the euro area as a whole (see graph) is much lower and the euro area’s government debt/GDP ratio of 86% in 2010 was about the same level as that of the US. Moreover, private-sector indebtedness across the euro area is markedly lower than in the highly leveraged Anglo-Saxon economies.
Crisis itself can become a wake-up call. It can rejuvenate our competitive spirit and force us to recognize the most pressing issues of the changing dynamic forces thrust upon us by the current economic recession. Once we awaken from that self induced complacent slumber of easy success and profitability it becomes much easier to recognize the signals and tremors of impending challenge and potential disaster. It becomes much easier to seize the initiative and harness the sense of urgency to create the change required to reposition the company to thrive during recovery.