The global financial crisis is based on speculation. The biggest hit: governments, banks, companies and households.

A few years ago, the speculation was the investment par excellence. Promoted mostly by large financial institutions, citizens and large investors , houses and properties were purchased at a great price to resell later at a much higher value than that of acquisition. Management that led to a large increase in price and the value of the properties. Banks trading very profitable and beneficial interest daily. Ferryman as loans, easy and profitable for anyone interested. Up to 100% of home value granted by financial institutions. What happened to all those years of economic boom created by global financial institutions?

Causes of the global crisis and how it affects the value of money

The economic crisis has its beginnings in the U.S. The property values ​​rose significantly and banks loans and loans granted numerous newspapers. The conditions required by these financial institutions were scarce, and therefore, the documentation required to process administrative were minimal. 100% of the value of the home was paid, and even indulged mortgage loans to unemployed and insolvent.

To process more loans the banks sold through financial markets bonds backed by mortgages to other entities, such as pension funds, insurance companies, investors and even to other banks. He speculated constantly to real estate. The crisis began with the decline in real estate prices. The property depreciates every day more and the price to acquire it has a much reduced to the originally acquired.

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The problem has the greatest impact when people realize the mismatch between the decline in home values ​​and rising money for them in the time of initial acquisition, the bank should more money than you actually acquire cost. Many people to not have enough purchasing power to meet all expenses generated daily in the family home because of the brutal crisis, was forced to default on their mortgages, creating total chaos.

Financial crisis created by fear and uncertainty among investors

This extreme situation caused by fear and uncertainty among financial institutions and investors that raises a lot of mortgage-backed bonds are quickly put up for sale. These buyers investors originally acquired him because they considered these acquisitions as a very good investment. The bond offering excessively increased alarmingly unbalanced demand thereof, with a consequent drop in prices. What their holders demanded its book value with selling prices in the market , much lower than acquired in its infancy. Companies such as banks and brokerage firms or insurers, who purchased these bonds managed multimillion economic losses in accounting income statements. They even go bankrupt because they can not deal with these circumstances.

The financial crisis is seriously affecting the economic, political and social

The currency crisis has reached such extreme levels and concern that is widespread in all economic, political and social. For banks with mortgage-backed securities held, have been severely affected by the economic crisis worldwide , having to endure heavy losses multimillionaires. Even banks that did not hold any mortgage-backed bond have also been affected. The central and federal governments worldwide, financial institutions, businesses and families have been severely affected by this cruel financial crisis currently plaguing the global economy.

Despair and despondency affect millions of people worldwide

The battered pockets and discouragement latent in small and large businesses, citizens and investors are unfortunately no reliable solutions to exit the financial and economic crisis suffering, have serious implications for society of each country. Unemployment rates increase considerably, and thus the moral despair and dejection. Maintain a positive stance on this will be taken into account in this time of economic scarcity. Accumulation of expenses and unpaid bills, lack of economic and social life caused by the weak economy of the families. A drop in sales of products in large and small businesses who can not cope with the debts generated daily. The lack of monetary liquidity accused in banks and savings and the serious problems facing governments, confirms the expression.