It seems that the USA is experiencing the same thing Hong Kong experienced in 2003， when the housing bubble burst and the SARS virus Being a small open economy， Hong Kong can do nothing to remedy the The USA is different， it has fiscal and monetary policy on its I hope that America will try their best to reverse the trend so that the world economy will grow A recession in the US will certainly affect China， because the growth of the Chinese economy is， to a certain extent， export-led and America is the largest market for Chinese If the Chinese economy is affected， it will affect Hong Kong too because every year we have a large number of visitors from C They also buy houses as well as stocks and shares in Hong K However， it will be impossible to have a recession as severe as the great depression of 1930’ The reasons are as follows: The gold standard has been In the past， a dollar was not just a piece of paper， it was also a piece of You could convert it into gold at a fixed Now a dollar is just a piece of Under the gold standard the government lost the freedom to control (or to increase) the money Now the government can print as much money as she The probability of having inflation is much larger than that of having a The knowledge that private virtue is public Private individuals still want to save more and spend less during bad But governments know that people should spend more in bad To encourage people to do so， governments will have deficit budgets by cutting taxes and spend more money than they Governments learn from The experience of the Great Depression leads them to prevent such a tragedy from happening The PD thesis of Ben Bernanke (Chairman of the Federal Reserve of the US) is about the causes of the Great Depression and how to prevent it from happening There are coordinated measures taken by the main countries of the world， including those of the emerging economies such as C During the Great Depression， the governments did not take coordinated measures， and one country’s measure was nullified by another country’s
The term financial crisis is applied broadly to a variety of situations in which some financial institutions or assets suddenly lose a large part of their In the 19th and early 20th centuries， many financial crises were associated with banking panics， and many recessions coincided with these Other situations that are often called financial crises include stock market crashes and the bursting of other financial bubbles， currency crises， and sovereign Many economists have offered theories about how financial crises develop and how they could be There is little consensus， however， and financial crises are still a regular occurrence around the The global financial crisis of 2008 is a major financial crisis， the worst of its kind since 1987， and which is ongoing as of mid-November It became prominently visible in September 2008 with the failure， merger or conservatorship of several large United States-based financial The underlying causes leading to the crisis had been reported in business journals for many months before September， with commentary about the financial stability of leading US and European investment banks， insurance firms and mortgage banks consequent to the subprime mortgage Beginning with failures of large financial institutions in the United States， it rapidly evolved into a global crisis resulting in a number of European bank failures and declines in various stock indexes， and large reductions in the market value of equities (stock) and commodities The crisis has led to a liquidity problem and the de-leveraging of financial institutions especially in the United States and Europe， which further accelerated the liquidity World political leaders and national ministers of finance and central bank directors have coordinated their efforts to reduce fears but the crisis is ongoing and continues to change， evolving at the close of October into a currency crisis with investors transferring vast capital resources into stronger currencies such as the yen， the dollar and the Swiss franc， leading many emergent economies to seek aid from the International Monetary F The crisis was triggered by the subprime mortgage crisis and is an acute phase of the financial crisis of 2007–
