What is a financial crisis ?

What is a financial crisis ?

The finanical crisis of 2008 was a major one. It was the worst economic disaster since the Great Deppresion of 1929.

You like ice-cream but you usually don't have enough money to eat ice-cream. A friend of yours assures you that he will provide the money so that you can enjoy expensive, good-quality ice-cream and you can return him money over time.

However, you and him both know that you don't earn enough money (duh! you're a kid) to be able to pay him back.

Your friend sells your debt to a neighboring uncle who believed him because the church father has assured the uncle that this is good opportunity to make some money. The uncle is very helpful and nobody in your neighborhood would like if something bad happened to that uncle.

You enjoy ice-cream for some days and don't pay back your friend. Ultimately, the uncle loses money. He's depressed and suicidal. The society (society is used here for government) ultimately decides to pool money and keeps the uncle afloat. So, everybody loses money and now nobody has enough money to buy ice-cream.

And who's fault is that .............

The friend put everybody at risk by convincing you that you can have expensive ice-cream even without paying eventually for it.

MY OPINION

In my opinion i think everyone thinks that money is amazing and it is all that they need in life , but really money is not that amazing sometimes it just causes trouble , pressure and stress( i will admit i got this example from a video but i thought i would share it to as i thought it amazing).

please leve your comments down below .

Comments (5)

  • Olivia-Avatar.jpg Olivia @ the BNC 01 Nov 2018

    Thanks versatile horse, this is a good way to easily explain the crisis and what happened! If you used another website to do your research, please make sure you include a link to it so that other people can check out your source!

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  • St-Josephs-Northfleet-logo-250x250.jpg crafty_panda_bear
    St Joseph's Catholic Primary School, Northfleet 14 Nov 2018

    Yes this is a very thoughtful post and made me understand the financial crisis a bit more. If you have any place that you did this research please leave a link I would love to and check it out and see for myself what it truly has to offer! Thanks again for this amazing post it really makes the financial crisis clearer. If you want to find out more about the financial crisis please go to this link.
    https://www.jpmorgan.com/global/research/10-years-after-crisis

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  • Elaine-logo-250x250.jpg openminded_skill
    Elaine Primary School 30 Nov 2018

    The impact on the UK economy of the financial crisis was intimidating, and the country continues to fight the marks are left to this day. 

    The financial crisis’ impact on the UK economy was larger than many other countries, due to some specific factors. The UK had no big manufacturing base and previous growth had been fuelled by financial services and activities that included a lot of house buying and high retail sales that had been dependent upon credit. Ultimately, this meant that when house prices started their to fall and credit sources turned bad, the UK suffered an negative impact on the UK economy, resulting in the country having to face long term consequences. 

    When the big banks started to understand the terrifying situation , there was an immediate reduction in bank to bank lending. Financial institutions continued to borrow found that the rate for interbank lending had doubled overnight, therefore the costs for insuring credit shot up. When the reduction in lending took hold there was a downturn in all kinds of business sectors; this was especially true in the housing industry. 

    It is difficult to pinpoint exactly what triggered these unfortunate sequence of events, as it was such a shock to our economy. The UK continue to fight the battle scars are left to this day.

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  • Olivia-Avatar.jpg Olivia @ the BNC 30 Nov 2018 in reply to openminded_skill's comment

    Please write all comments in your own words. Thanks!

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