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The financial crisis in Europe: who is to blame and what to do

The financial crisis in Europe: who is to blame and what to do

The financial crisis in Europe posed a threat to the well-being of the global economy.

Some countries are threatened with bankruptcy.

Whether accidental crisis, or it happened because of the errors of politicians and economists.

Who is guilty?

It may be noted the connection between the collapse ofUS stock market and the crisis in Europe. Under attack were Greece, Cyprus, Spain and Iceland. These countries have brought public debt to the size of the annual GDP (gross domestic product- all goods and services produced in the country, in terms of money). European Union countries almost caught up with the United States on the size of the national debt to its creditors. Objectively, the leading economy at the moment is China, the largest creditor of the world.

What to do?

According to the theory of Soviet scientist NikolaiKondratieff crises contribute to the cyclical development of the economy. "Kondratieff Cycle" has a duration of 45-60 years, including growth and downs of the market.

Despite the danger of the European crisisthe world economy, there are people who earn a significant rate fluctuations and the general chaos of the large sums of money. Model the behavior of the stock market should be the opposite of nervousness, "the movement of the crowd." One of the most famous investor in the world Warren Buffett earned very large sums at a time when stocks of known companies on the stock exchange have fallen to record lows.
Property in Spain and Greece has taken a beating inprice. In this regard, the governments of these European countries have simplified the process of privatization of apartments, houses and land. Sale of the property may alleviate the situation of governments and be a good investment of foreign investors' money.

"Black Swan"

The Greek economy has a deficit in the amount of 150% of GDP. Public debt in France, Germany and the United Kingdom exceeds 100% of GDP.

American economist Nicholas Taleb in hisbook "The Black Swan" has accused prominent world politicians and financiers reckless conduct. Trusting complicated formulas and mathematical models, they no longer feel the reality, says Taleb. "Black Swan" - a serious event, which inverse images has never happened before. The thought: "If you do not see black swans, this does not mean that they are not at all" red thread that runs through the work of the financier and a recognized thinker.

Possible developments

Europe's economy is rather fragile. Foreign exchange reserves of many major economies (Germany, UK, France) do not rely on gold and US Treasury bonds. America's national debt is growing, and Barack Obama has not yet found the "antidote" US economic stagnation.
The economy of Europe can get out of the collapse,reducing costs and increasing the funding of the real sector. "Bubbles", accumulated in the areas of finance, IT and consulting, sooner or later burst. European governments need to reduce the size of debt per se and benefits of investment in crumbling banks and monopoly structure.
If Europe does not respond to the signals,filed by the crisis, and will continue to increase its debt powerful states, this could lead to another "Black Swan" unprecedented scale before. Millions of people could be left without pensions and salaries. Europe's economy is under threat, and only sensible policy can improve the situation, though without resorting to populism.

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