One of the most important reasons for this crisis in my opinion is developed countries' huge lock out of funds in arms of massive destruction which we know are thousants of trilions of dollars , now laying idle , following the race of arming.
Definintely , this would have its impact on the crisis .
Saturday, December 19, 2009
Subscribe to:
Post Comments (Atom)
3 comments:
Rightly pointed out brother. People need bread not bombs.
You may never label the arms race as the "most important reason of economic crisis". how can it be? There is no support of evidence. American arm industry (the true market of mass destruction) and drugs (weapons of mass 'distraction') contribute MAXIMALLY to their income and revenue. Can you label their interests in arms (and killing people around the planet) as the primary cause of their recent financial crash out?
Actually... looking at it from an economists point of view; having a large budget allocated to the defense sector does not result in an economic crisis. Locking out funds for defense is another issue altogether.
What actually led to this was the housing boom in the united states which then led to all this. loans and mortgages became so easy to get that loans and mortgages increased and with that so did interest rates. Now when this happened people couldn't pay off their loans which eventually led to this credit blockage. moreover housing rates fell but interest rates rose which resulted in an even more adverse problem. And then on the other hand investors stopped investing because of insecurity and lack of confidence in the market and thus this led to a domino effect or a "multiplier effect" in economic terms, which then began to effect the rest of the world in its own way.
Post a Comment