When the financial crisis has become the norm

 When the financial crisis has become the norm
2009   05   22  Source: Shanghai Securities News on: Guan Qingyou
from prosperity to recession and depression, often accompanied by financial crisis and economic crisis. As the 19th century French economist Zhu Glasgow said, large are: Kitchin cycle (short cycle), Zhu Guerra cycle (the cycle), Kondratieff cycle (long cycle or long wave), Kuznets cycle (long cycle), Schumpeter cycle (innovation cycle) and so on. on the interpretation of the economic cycle can be divided into external and internal factors on the theory. external causes of that cycle from economic factors outside the system mm sunspots, war, revolution, election, gold, or the discovery of new resources, science breakthrough or technological innovation and so on. internal factors of that period economic system from the internal mm revenue, cost, investment under the market mechanism inevitable. Of course, the reasons for the economic cycle will result in a multiple, complex, making it difficult From one perspective to explain the economic cycle.
4.5, the amplitude of the quite regular; downward phase of an average of 6 to 9 months, the amplitude is limited. many similar decline and will not turn into a recession, only the economic growth cycle downturn. Zhu Glasgow cycle is typical of capital expenditure cycle, an average of 9 years, the frequency by the innovation, trade liberalization and other factors which have changed; typical recession will last 2 to 2.5 years, the amplitude may be larger. Kuznets cycle is a typical real estate cycle, the average 18 years, the frequency change in the trend and by the impact of interest rate structure; typical recession will last 3-3.5 years, a large amplitude. Generally speaking, began flourishing in the real estate after 15 to 16 years, the market failure of crazy dynamics serious excess supply over demand, inflation is also high, the central bank will raise interest rates to control the situation, the real estate market to a standstill, and then is collapsed. As a result, the debt crunch, banking crisis and economic crisis. experienced an economic cycle of about four an inventory cycle, the two capital expenditure cycle, and a real estate cycle.
may wish to this analogy to be a global financial crisis. If by Las. Tweed to say, to the time of full-blown crisis Push forward 18 years, would come to a terrible conclusion: the real estate cycle of 18 years or so the basic set up. because of the last century, the late eighties early nineties, the major Western powers a massive economic crisis, the stock market , In 1987 the property market bubble burst, due to the worsening economic outlook and the continuing Middle East tensions, the Wall Street crash, markets around the world have collapsed in the crisis be eased until 1992. while Japan experienced a bubble in stock and property markets burst, the slide of the During the oil crisis.
From this perspective, this is just the U.S. financial crisis erupted economic cycle transition from prosperity to recession, financial crises in history there is no much different. As early as two or three years ago, we financial crisis is expected, but did not think occurred in the United States, and the range is so large, the impact is so profound. China since reform and opening up the Western world has experienced the outbreak of large-scale test of the financial crisis has proven, if taken the right way, we can very well deal with the financial crisis hit us.
Kindleberger said that the core issue of the financial crisis is a speculative factor in whether the market is stable or unstable factors other words mm words, whether the market is always rational. The traditional cycle theory that financial factors will not materially affect the real economy, emphasizing the physical factors in the economic cycle, the role of generation and transmission. However, successive currency crises and the financial crisis has proved that operation of financial factors on the impact of the economic cycle is significant, history abound on the famous case. If the Dutch tulip bubble, the British South Sea Bubble, and we have experienced the Asian financial crisis and the current global financial crisis.
International the economic cycle, monetary system and the frequency of the financial crisis has a decisive role. in order to decouple the dollar and gold in 1971 as the boundary, before that, due to the implementation of the gold standard or gold mm Dollar Standard, the world economy with gold as a standard credit system or constrained by the gold, the financial crisis is much smaller than the frequency of occurrence after 1971.
1971, the world economy lost credit system constraints, the proliferation of paper money standard become the norm under the U.S. dollar, changes in U.S. monetary policy can easily lead to or exacerbate the crisis. For example, the U.S. rate hike cycle, which, due to large amounts of capital from non-US markets to the U.S., it is easy to some of the emerging financial crisis in developing countries. coupled with the economic and financial globalization context, since both the financial crisis economic cycle conversion factors, but also factors in the financial system itself, to speed up the frequency of financial crises, but also accelerated the conversion of the economic cycle.
from the nature and duration of the crisis, if the speculative bubble caused by the simple crisis , the economy resumed a short time. If the speculative bubble caused by the financial system crisis, economic recovery will take several years. If the currency crisis, financial crisis and interwoven with the economic crisis, the economic recovery takes longer.
After the collapse of the Bretton Woods system, financial crises become the norm, the U.S. dollar standard system under the reincarnation of the financial crisis is almost inevitable. Seventeen years to a major crisis, one in seven or eight years to the crisis, three to four years in a small crisis. This is like global climate change, humans can not curb the trend of climate change can only try to mitigate and adapt. The financial crisis is also why we can not prevent its occurrence, can only try to prepare for the crisis comes, reduce losses and to adapt to life in times of crisis.