Financial crisis is a topic which interests greater number of students every year. This topic is relevant for the present days. That’s why students choose to write an essay about financial crisis at universities or colleges. The benefit of writing a basic essay about financial crisis is that the writer is actually living in times of its happening. That gives him a chance to present subjective opinion of the current situation from financial and economic point of view of certain countries.
Writing an Essay About Financial Crisis
Essay Outline. Essay about financial crisis should outline the main reasons of the crisis in the country, its negative effects on the economic growth and society well-being. The next step is to present potential ways how to predict and prevent possible crises in the future according to essay basics structure.
Past two decades were famous for a number of financial crises in all the economy of many countries worldwide. As a rule, every crisis is followed by economic recessions, and sometimes effect it makes is absolutely devastating.
The crucial nature of crisis in financial sphere is a topic that interests many researches. Economists try to analyze the reasons and mechanism of the crisis, predict possible ways of its development and evaluate the damage it will cause.
One of the research aspects is comparing crises in different countries and trying to create a plan for avoiding their negative afterwards effects.
Focusing on Financial Crises Details
There are different mechanisms of the financial crisis development. Every country has some peculiarities, but there is a specific pattern for describing common periods of financial crises.
Collapse in asset prices, plunge in capital flight and bank-credit.
Boom in asset prices, investment, bank lending and capital inflows.
Causes of financial crisis
Banks lend people more money than they can afford to take. The reason why this happens is that there is very low possibility that all depositors will ask their money back at the same time. If this happens, the banks will definitely fail.
An employment of “fractional reserve” policy by banks takes place.
Fiat money and fractional reserve banking allows banks to access “free” money. At the same time it makes government to appear to be “generous” by giving over-promising of social welfare.
Financial crises have the roots in the easy credit expansion. It creates the financial “boom and bust” cycles.
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Solutions for financial crisis
Reinstitute the money that are backed by real commodities. Ideally, all currency should be backed by gold, as gold is the only money that evolved over time. It is important to understand that gold and silver is money for market when fiat money are for government.
Abolish fiat money.
Start abolishing all central banks.
Let private banks issue 100% of money backed by gold.
Take the issuance of money away from the hands of government. Different kinds of manipulations will be made as long as they have a control of issuance.
Make gold a global currency. It will prevent the government manipulations.
Have free-banking, 100% gold backed monetary system. This solution will attack the problem at the root and save the national finance from further crises.
These are possible ways of solving the problem of financial crisis if at least one action from this list can be successfully done, all the countries will feel remarkable improvement.
There are several important aspects you should understand writing essay about financial crisis in accordance with essay basics.
Review how the current financial crisis has catalyzed an array of responses.
Search for financial crisis’s causes.
Clear understanding of financial crisis cause will help to provide suggestions for finding a “remedy”.
Array responses should also include reworking regulations and scapegoating.
Review the possibility of massive capital injections.
Narrow down the topic and review one industry that financial crisis has influenced the most. (For example, how the financial crisis has affected the automobile industry?)
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