What economic crises have changed the way millennials think

The great economic crisis seems to be at the door again and it is ringing insistently, at least that is how it is understood from the forecasts of the financiers and analysts. It is said that if you want to know your future you must know your past.

About the financial crisis

Going through the many financial crises that have affected humanity means that you can better understand the economic and social events that are happening now. Like analyzing reviews of a product or website on Norskeanmeldelser, it can help you better understand whether it’s worth investing in or not.

It was also found that people began to resort to secured loans to overcome possible financial crises. Axo is a very good and safe alternative when you go through bad times. Of course, it is important to learn from past financial crises.

Here is, in short, a top of the economic crises of the last century:

The oil crisis of 1973

The oil crisis began on October 15, 1973, when OHIM (respectively the Arab countries in OPEC plus Egypt and Syria) decided to stop oil supplies to the United States and other developed countries – especially the Netherlands – that supported Israel in the Yom War. Kippur. It was the first time a natural resource was used as a weapon and as a result of the embargo, the price of oil rose extremely quickly from $ 3 to $ 12 a barrel (so a 300% increase).

crisis

Importing countries have been severely affected by the crisis as the world economy has suffered for years from the denunciation of the Bretton Woods agreement. The oil crisis was the starting point for a new approach to energy consumption, with the focus now on reducing it.

Panic of 1907 (USA)

This crisis was generated by the collapse of the banking system (because of this it is also called “the 1907 Bankers’ Panic”), a system that against the background of the recession at that time, faced massive withdrawals of money, bankruptcies. and with a drastic drop in confidence in banks.

At that time, there was no “official” institution to guarantee deposits or inject liquidity into the economy (the Fed was founded in 1913). The DJIA collapsed in March, followed by another serious drop in October when the US Treasury and JP Morgan provided the necessary liquidity to the banking system. Confidence was restored in February 1908.

The Asian crisis of 1997-1999

It all started in Thailand in July 1997 when the local currency, the bath, depreciated massively when the government decided to release the exchange rate (until then the currency was pegged to the dollar). With huge foreign debt, Thailand has almost gone bankrupt and this crisis has spread rapidly in the area, covering all of Southeast Asia, including Japan.

The hardest-hit countries were:

  • South Korea
  • Indonesia
  • Thailand

┬áThese have been helped by the IMF through a $ 40 billion loan, mainly aimed at stabilizing exchange rates. Two years later, the area’s economy began to recover.

The crisis in Mexico 1994

In the years before this crisis, the Mexican economy grew a lot and in the conditions in which the exchange rate was kept strictly under control, the economic imbalances grew very fast. Sometime before the elections, the administration led by President Carlos Salinas de Gortari decided to inject a lot of money into the economy, increasing wages and pensions, thus increasing the budget deficit to an unsustainable level.

As usual, Gotari lost the election, and the new president Ernesto Zedillo decided that strict exchange rate control was a mistake and therefore allowed the national currency to fluctuate freely. Due to previous tensions in the economy, the peso has depreciated by 80% against the dollar in just one week (from 4 to 7.2 pesos per $). The US intervened quickly by buying the peso directly from the market and guaranteeing a $ 50 billion loan, the situation returning to normal in three weeks when the currency stabilized at a level of 6 pesos/dollar.

The economic crisis in Argentina – 1999-2002

This crisis has its origins in the early 1980s and 1990s when Argentina went through a military dictatorship, a war with England (the Falklands War), rampant inflation that had reached a level of 200 % per month in July 1989, and also, the public debt was at an unsustainable level.

In 1999 the population began to withdraw their money en masse from the banks, to turn them into dollars to transfer them across the border and when the government froze the deposits for a year, the situation degenerated in the sense that extremely popular uprisings took place. violent, people turning their anger on banks and American and European companies that are active in Argentina. If before 1999 the exchange rate was fixed (1 peso = 1 dollar), when it was liberalized, the national currency devalued from 1/1 to 4/1. The situation has normalized since 2002/2003.