Globalisation of Economic Crises

Abstract

We can ask ourselves why the Great Depression of 1929 is relevant to the major economic crisis that hit the world in 2008. Originally, today's crisis is related to the housing sector, whereby the crisis does not involve insufficient amounts of housing resources, but the crisis of their excesses. The economic crises of the 20th century, especially those of the 1970s (the beginning of globalisation) were the result of the property price bubble implosion or a major depreciation of the national currency in the foreign exchange market and, in some cases, the foreign currency crisis fueled a banking crisis, whereas in other cases the banking crisis led to a currency crisis. Large amounts of capital (especially fictive) are splashed around in the world to create the possibility of flooding the area in which it occurs. Since its start in the 1970s, globalisation has been manifested worldwide as the volatility of commodity prices, currencies, property and stocks, as well as a number of strong financial crises. Bubbles always explode. By definition, a bubble contains an unsustainable pattern of changes of prices or cash flows.