Six Worst recessions ever

Six Severe Economy Breakdowns

  1. Weimar Germany (hyperinflation of the 1923)

After the World War I, Germany faced strong political and financial instability. The German treasury was all empty due to the world war outlay. The government with the inability to raise proper amount of taxes so that the economy blooms up again, the German government started printing money. But it didn’t go as such, the huge amount of money pumping in the economy caused hyperinflation, the prices skyrocketed which made the German currency less valuable.

  1. The great depression

This was said to be one of the world’s most severe economic contraction. This spanned from around 1929 till the Second World War. IT started with the stock market crashing in US in 1929. By 1932 the stock prices were at the floor of the graph. This marked the breaking down of the banking system, unemployment and a huge fall in the GDP. Though the US was severely hit by this, there were many more countries who were hit by this and few of them survived too. However, US got into a better state by around 1941 exactly before the start of the World War II.

  1. The Crisis of the 1973

The 1973 had one of the most severe war consequences which shook the world and the effect is still prevailing. The war between Syria and Egypt against Israel, also called as the Yom Kippur war. Due to some of the steps taken by the US for backing Israel in the war, Egypt and Syrian oil producers formed a cartel called OPEC (Organisation of Oil Exporting Countries) and reduced the supply of the oil which shot the oil prices up by 70%. This embargo was mainly for the US though every other oil importing nation was affected with the skyhigh prices of oil, which stumbled the economy of almost all the nations importing oil from Syria and Egypt.

Though the embargo was lifted up after five months yet the effect is still lingers. However the US was severely stuck with this problem and the NY stock exchange lost tens of billions due to this embargo.

  1. 1998 Russian financial crisis

Around August 1998, after the split of The USSR, Russia was on a course of serious crisis. The Russian economy had a fixed exchange rate regime which was unstable and with its fragile fiscal management made it more vulnerable and unstable. The giant had to face the spill over of the world market regarding the financial distress. The result was that the stock and bond, and currency markets collapsed which was a consequence of investor’s fears that the government may devalue the ruble. The economy tapered by around 5.4%. Also the oil prices fell to a half of what was earlier.

  1. The Lost Decade of Japan

Japan who had a sturdy economic growth in the 20th century fell flat in the years 1990-2000. The name Decade is just a name, in reality the crisis still prevais. In around the 1980s the Japanese economy had to face a price asset bubble on a high scale which was due to abnormalities in the market. What actually happened was that the Banks lent out money more easily to those in need of investments without having a view of the quality and ability of the borrower to repay. This inflated a bubble in the economy. With an attempt to deflate the speculations the BANK OF JAPAN raised the inter-bank lending rates which burst the bubble and the stock market crashed. The Japanese bank and insurance companies had to face largely the loss. The crisis brought into existence four National banks in japan and also the interest rate has been 1% ever since 1994.

  1. The Greece financial crisis

The Greece government joined the European Union by fraud, by showing the eligibility on papers when actually it wasn’t the reality. Greece Government started spending more than they collected in taxes. This caused a lack of fund within the economy which forced the Greek government to borrow funds from the European Union or IMF as loan. The government then cleared the immediate loans by borrowing thus keeping the government in debt. The lenders started asking for higher rates as there was also higher risk. There were bailouts where creditors helped the government to repay the loans by giving loans. The condition is as such that the country had to shut the banks for 10 days and even the ATHEX (Athens stock Exchange) was shut down. Greece currently is under debt of around 320 Billion EUROS.

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