How many years will continue for the crisis
August 2007 is considered to be the beginning of the global financial crisis. The British banking system is facing serious difficulties with the first five years ago, but out of a difficult situation is not yet clear. Has the world become closer to the end of the crisis over the past five years, and if so, when can we expect to improve the situation?
An analyst at hedge fund GLG Jamil Baz said that during the 2007-2012 period the situation in the global financial system has only worsened. Mr. Baz predicts severe shocks the economies of developed countries, which can lead to social protests.
Jamil Baz examined the financial condition of 11 countries in the context of the financial crisis. These countries were the United States, Canada, Germany, Greece, France, Ireland, Italy, Japan, Spain, Britain and Portugal. Mr. Baz stated that since 2007 the level of debt in these countries has grown.
This suggests that the financial crisis will not improve the economy of these countries. Thus, the crisis has not fulfilled the function of cleansing the system of ineffective models of doing business at the level of states, corporations and households associated with the accumulation of debt. Jamil Baz came to the conclusion that the crisis in the global economy will continue as long as the debt level is not reduced.
What will happen with the global economy in this regard? Mr. Baz sees the situation as follows:
1. The crisis of 2007-2012 years is just a prelude to the real shocks that reduce the level of debt of states, companies and households.
2. Historically, confirmed that the level of debt can not be reduced in a particular state by 10% or more per year without social upheaval. Thus, the economy of developed countries will be in a state of crisis over the next 15-20 years if governments can avoid mass protests and riots.
3. Debt reduction will be accompanied by economic decline, as costs the state, firms and individuals will decrease.
4. The value of shares will fall, as companies will reduce profits.
Five. All attempts by the authorities to rectify the situation will be useless, as the most effective tools to combat the crisis have already shown to be ineffective.
Jamil Baz said that the world economy can cope with the crisis ahead of a sharp drop in commodity prices. Judge refers to 2008, when a barrel of Brent crude oil fell to $ 40 147. Today the price of oil stays near $ 100 mark, which does not allow the economies of developed countries to recover. However, the fall in oil prices will lead to economic collapse and social upheaval in the exporting of raw materials.
Thus, if we talk about the exit from the crisis without revolutions and protests, it is necessary to have patience. Maybe in 20 years, our children and grandchildren will enjoy the fruits of a healthy economic growth.