The financial crisis of 2008-2009 is a major financial crisis. It became prominently visible in September 2008 with the bankruptcy, merger, or conservatorship of several large United States-based financial firms. The main causes of the crisis had been published in business journals for many months before September, with commentary on the financial stability of major U.S. investment banks and Europe, insurance companies and mortgage banks following the subprime mortgage crisis.
From the failures of large financial institutions in the United States, quickly became a global credit crisis, deflation and a sharp reduction in shipping resulting in a number of European bank failures and declining rates diverse actions, and a reduction in market value of equities (stocks) and commodities worldwide.
The credit crisis was exacerbated by Section 128 of the Law on Emergency Economic Stabilization 2008, which allowed the Federal Reserve System to pay interest on excess reserve balances held on deposit from banks, removing the long-term incentive for banks to extend credit instead of cash on deposit with the Treasury's central bank. The crisis led to a problem of liquidity and deleveraging of financial institutions, especially in the United States and Europe, which further accelerated the liquidity crisis and a decline in international shipping and trade. Political leaders and national ministers of finance and central bank directors have coordinated their efforts to reduce fears but the crisis continues and continues to change, evolving at the end of January in a currency crisis with investors transferring large capital resources stronger currencies like the yen, dollar and Swiss franc, leading many emerging economies to seek help from the International Monetary Fund. The crisis was triggered by the crisis of subprime mortgages and is an acute phase of the financial crisis of 2007-2008.
Russia's economy affected
The Russian financial crisis of 2008-2009, part of the global economic crisis of 2008, is a crisis in financial markets of Russia, who came from the crisis in U.S. sub-prime mortgages and has been compounded by political fears after the war with Georgia, and the falling oil price of Urals heavy crude, which has lost more than 70% of its value since its record high of $ 147 on 4 in July 2008. While according to the World Bank, Russia's strong short-term macroeconomic fundamentals make it better prepared than many emerging economies to tackle the crisis, structural weaknesses and high dependence on a single product price that its impact more pronounced than would be the case. Fiscal agile and heavy financial reserves have protected Russia could more deeply the consequences of this clash.
Reasons why gold will rise in 2009
Treasury Secretary Paulson spoke about the current crisis is potentially worse than the Great Depression. Alan Greenspan told Congress that the financial crisis had left him in a "state of shocked disbelief." The leading economists are saying "this looks an awful lot like the beginning of the second Great Depression."
U.S. consumer confidence has fallen more sharply than at any other time since records began in 1978. From 09 September, we saw the nationalization of Fannie Mae, Freddie Mac and AIG, the socialization of the automobile industry, the demise of investment banking, a ransom of $ 700 million with another recently passed stimulus plan, the Lehman Brothers; "breaking the buck" of the supposedly solid money market funds, the largest bank failure in history, the implosion of global stock markets, falling housing values, retail sales and consumer confidence, the biggest drop in industrial production in 34 years, and one unprecedented breach of trust, both in commodities and financial assets. It is increasingly apparent that fear predominates. Individual investors are abandoning anything with the slightest hint of risk. Last year was the worst year for global equity markets since the Great Depression, the Dow suffered its worst annual drop since 1931. Investors are taking large amounts of money from hedge funds, mutual funds and bond mutual funds in one of the biggest flights to safety in the financial industry has ever seen. Defensive asset class have assets that have the same risk / return characteristics are positively correlated with each other and are traditional inflation hedges that are negatively correlated with stocks - they do well when stocks do poorly. Historically, the main defensive assets has been the gold. Of the main assets, bonds and gold have only escaped the selling panic that gripped the markets. Gold rose 5. 4% over 2008, ending the year above $ 850 a troy ounce. Gold bullion reached $ 1030.80 in mid-March and mints around the world ran out of popular gold coins and small bars of gold after the collapse of Lehman Brothers in September. The U.S. rate cutreduced to virtually zero opportunity cost of buying gold and gold ETF holdings have soared from 7 million ounces to more than 30 million ounces in less than four years of gold is different from other precious metals such as platinum, palladium and silver because the demand for these precious metals arises mainly from its industrial applications.
Increase in value of gold is derived from its use and worldwide acceptance as a store of value and a safe haven. Other precious metals also have been classified as defensive assets, but have not worked as well as gold during the crisis. For example, investment accounts for about 90% of gold demand, while investment represents only one third of the total demand for platinum. Therefore, although gold has done well, demand for platinum is for industrial use has declined rapidly, particularly due to the high concentration of platinum use in new cars - an endangered species in an economy that the automakers are asking Washington for funds to keep afloat. The price of gold has been supported by the view that it is a safe haven in times of economic or political uncertainty, while industrial demand for platinum has plummeted. Platinum reached a record high of $ 2267.00 per ounce in March, but fell like a stone from there, like silver. Platinum fell nearly 60% since its peak in March, while silver fell 47%. The last time gold traded for more than platinum was January 21, 1994, when gold closed at $ 381.70 and $ 380.90 platinum.
