The following details are going to be based on the World news in a business perspective. There will be news posted twice a week on most enthusiastic articles used from www.euronews.net website.
Introducing the business world, we know that a Credit Crunch occurred in late 2007. This started from US banks not lending money to their customers due to the fact that there was a big debt starting when customers did not pay the banks in the correct agreed timing. This has lead to customer dissatisfaction and mistrust to the largest banks in US. Afterwords, a crisis appeared which nobody was expecting; the operating financial intermediaries and public limited companies which sold their shares yesterday for (example) $1000 per 0.001%, today were sold for only $10.
A big fall in the price of the shares shocked the whole financial market. Therefore, the Federal Reserve System came to fix the chaos and the value of American dollar depreciated by 25 cents against Canadian dollar from 2008-2009, which was 1 dollar. However, from 2009-2010 appreciated to one dollar against 1 Canadian dollar, and had a plus minus 5 cents until today. This effected both international trade and the businesses operating in US. The Federal Reserve System used the theories from the monetary policy to help keep the dollar as stable as possible. This led to less goods being exported, and more goods being imported with very high taxes.
Panic in the financial market affected car manufacturers and created massive competition between the car industries, which led to lots of car industries closing down, making prices fall by at least 50%. In US, there is a called GM and it's the largest car manufacturers in USA. This company got bankrupted and had over 50,000 employees. Well, the unemployment in the short term grew by 3.8%, which is about 5.8 million people unemployed.
This has brought up a new problem which was caused from the fall in prices and created a massive recession. A big fall in prices of goods sold made a lot of businesses close up and lose finance. This slowdown in the economy of US has spread throughout the World and effected everybody.
The spread of this panic was as fast as an economical HIV, and the next article will be on which kind of effect did this spread give.
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