The Global Economic and the Financial Crisis
The worst economic and the financial disaster of modern era is now almost over and most of the countries are now recovering from it. The situation is utterly different from the one that media shows and this crisis did not emerge suddenly. It is a result of poor financial policies which have been adopted in the last two decades.
The first signs of this economic crisis started to appear in the late 1990s and at the beginning of new millennium. The companies were not able to sense the threat and continued to shift their businesses online and selling items through credit cards. E-commerce did bring positive things but like anything else, brought its drawbacks with it. Sadly, the consequences of this online purchasing system were far reaching than the benefits.
Circulation of money has positive effects on the economic and the financial indicators. Money has to circulate in the market to help grow the economy but in this scenario, it is either held by the banks or the customers and most of the corporate entities collapsed due to ill management of finances. Their return on investment was close to nil in the worsening economic and the financial situation whereas interest rates on loans from banks kept on mounting and that drained their held finances as well. The organizations were threatened to be taken to liquidation and few survived the scare.
The economic and social effects of this crisis were devastating in some countries especially Philippines and they might get even worse. The world does not have the idea of severity of the problem. Millions of Filipino workers have lost their jobs due to this economic and the financial crisis and have been forced to move to their native soil. They were major contributors of foreign exchange to their country in this economic and the financial downturn but now they have joined hands with millions of unemployed people.
It is repeatedly said now that the world might face another economic and financial crisis in the year 2016 which might last for 2 to 3 years. The analysis performed considering the economic and financial position of different countries and the financial situation of different markets causes the analysts to believe that the period of 2016 will be much worse.
The “supposed” war on terror has cost billions of dollars to various countries and it is one of the basic reasons of economic and the regularly discussed “security” crisis. It is not predictable that how long this war will go but the economic and security situation of the world will continue to get worse.
The point to ponder is that the politicians do not understand the economic and the financial situation of the world and they always come up with useless solutions. The things that caused the present economic and job crisis will be the base for the next crisis as well. America and Japan will probably be the first countries to come under attack of the future economic and other related crisis.
You can assess the risk yourself as well and should not believe in all the analysis because they may not always be true. If the economic and other indicators look positive to you then they probably will be. Avoid taking excessive risk while planning any investment in this economic and social downturn. Short term investments will be beneficial for you though they may not give you high returns. The term “high risk high return” is logically true but only if you can bear the loss.
If the world wants to avoid future economic and financial crisis then immediate measures should be taken. The politicians should not play any role in the formulation of economic and financial policies unless they have proper knowledge of the matter.