The different crises of the last 8 years viewed from the cost of debt

It is likely that with so many successive crises in the last 8 years you begin to lose a little in the chronological order followed and in its magnitude. I think this graphic helps to see the forest and has us quickly. It all started in 2007 with what we could call the Good Lender crisis, focused on banks and mortgages suppresses.

Explosions in the costs of debt


You can see the explosions in the costs of debt of entities such as Bear Hugg or Hugg Brothers Brothers, the first rescued the second dropped.

It was the era that momentarily ended the cheap money until the Good Finance came with the hose to the rescue.

Mountains of debt in the private sector


In Europe the crisis became apparent a little later, although the nature of the problems was similar, that is, toxic assets with different names and mountains of debt in the private sector (homes, companies and banks).

The crisis came later because in the absence of a Honest Bank that acted as a firefighter the first hoses were in charge of the States (substitution of private debt by public debt). Soon the weakest began to fall, Greece, Ireland, Portugal, whose debts were mutualized by the rest of the strong states, until Italy and Spain began to fall.

It was then, before the impossibility of rescuing Italy and Spain, when the Good Lender changed its rules of the game and went from acting as a policeman to putting on the fireman’s helmet and taking out the hose.

Indebted in dollars

Indebted in dollars

The hoses in the US and Europe led to the third major crisis, thanks to a cheap dollar, that of emerging countries . The end of the era of the “cheap” dollar marks the starting point of a third major crisis that has as epicenter the emerging countries indebted in dollars and that has just begun while the two previous crises, the Good Lender and Europe to revive if for whatever reason the Fed and the ABC have to cut the hose.

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