Why We Are on the Verge of the Biggest Depression since 1929
The financial crisis of 2007–2008, also known as the global financial crisis and the 2008 financial crisis, is considered by many economists to have been the worst financial crisis since the Great Depression of the 1930s.
It began in 2007 with a crisis in the subprime mortgage market in the USA, and developed into a full-blown international banking crisis with the collapse of the investment bank Lehman Brothers on September 15, 2008. Excessive risk taking by banks such as Lehman Brothers helped to magnify the financial impact globally. Massive bail-outs of financial institutions and other palliative monetary and fiscal policies were employed to prevent a possible collapse of the world's financial system. The crisis was nonetheless followed by a global economic downturn, the Great Recession. The Eurozone crisis, a crisis in the banking system of the European countries using the euro, followed later.
A downturn, or a crisis, does not mean that the current system comes to a halt. There is nothing to suggest that the present crisis is paving the way for the collapse of the capitalist system. It signifies the opening of a new epoch in history, in which some of the old structures give way and new forms may develop to radically affect the global structures of power and hegemony. However, if the current pattern of global imbalances and vulnerabilities persists, so will recurrent financial and economic crises of the kind we have seen recently.
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Posted by Nicole Bourbaki