Financial Crises

Financial Crises, they are so predictable and yet people fall for them. Someone once said: “History always repeats itself”. If this is true, how is it than poss-ible that an experienced investor looses everything he owns in the second or third market crash that he is experiencing? How is it possible that mature economic advisors tell us days before a crash that the economy will keep growing for years even though they saw the indicators and under-stand what they mean?!

How is it possible that our bank advisor tell us that our savings are secure just hours before his boss announces the bankruptcy of the bank? The only way how we can prepare for the next crisis is to know how they happen, when they happen and what to do when the markets crash. One cannot rely on so called experts, they where almost all wrong. However, some people knew what was coming, some people understood the signs and tried to warn us, or did they just get lucky? In times of greed and a public money fountain called the stock market nobody wants to listen to prophets that predict the financial apocalypse to be just around the corner. Despite the risks, we all tried to make money until the last minute.

Or we try to hide behind our proclaimed advisors and tell them that it is their mistake. But isn’t it also our own responsibility by trusting strangers with our money so much that we did not even educate ourselves from independent sources about the possibilities of losing everything? However, it is often not the speculative investor that these days hit the hardest. It is ‘Jimmy Averageman’. He was just doing his job at at a GM factory, Ford salesman, or the receptionist at HSH Nordbank, who never invested any money besides in taking a bank loan to buy his family a house in suburbia. And it is this guy who now lost his job and his house because he cannot pay the loan anymore and whose wife ran away because she cannot stand his misery.

However, one thing is important for all of us and that is to get up, to learn out of our mistakes, to study what happened and to take care that something like this will not hit us again, or at least not that hard. This book’s purpose is to educate the reader about the current and past crises. To show that history repeats itself and to make the reader aware of how financial crises develop long before the markets collapse. A detailed focus is put on the 2007-2009 crisis, since this crisis is the most recent and concerns us the most. It is possible to start reading the book at any point. Interrela-tions are repeatedly explained to highline the connections and relations in which the following incidents happened.