The world is increasingly faced with economic disasters and anomalies
The most unfortunate economy in the world in 2017, can finally disappear. Venezuela is waiting for an abnormal inflation in the 1640 per cent — with this increase, price of no recovery, and the more development, however. History knows many examples when countries were faced with large numbers with galloping inflation, the incredible growth of GDP or with reckless devaluation. .ru remembered the most vivid episodes of economic chaos.
1640 percent inflation: Bolivar has no food
In 2016, prices in Venezuela will grow by 480% in 2017 already on 1640 percent. About this Bolivarian Republic, warned the IMF.
But it is unlikely that President Maduro to hear experts from Washington. With the International monetary Fund Caracas does not communicate for 10 years. The country finally hooked on expensive oil, for which he now pays. But the authorities refuse to recognize the internal imperfection of the system, built under Comandante Chavez. They are haunted by the ghosts of the conspiracy.
In Venezuela now at every step a long queue. The total deficit arose from the combination of two very adverse factors: the Dutch disease in the country was developed only the oil industry, other sectors, including agriculture, were dying) and the collapse of oil prices (the flow of export earnings dried up, gone to buy food and other goods abroad). And people stand for hours to buy something. So, Nicolas Maduro is sure that the queue is the result of the machinations of hostile external forces in order to raise a wave of popular discontent. “Yesterday we detected that a famous chain of stores wove a conspiracy, harassing people,” he commented on the arrest of one of managers in early 2015.
A year later the situation became critical. The economy was placed under the control of defense Minister Vladimir lópez. In the capital is not enough, 80 percent of the commodities (the data of the company Datanalisis). Bloomberg had recognized Venezuela as the most miserable country in the world (misery index = inflation rate + unemployment in Venezuela it reached 159,7 percent by the beginning of 2016 and estimated that in 20 years the government nationalized about a thousand private enterprises. People have to walk (just walk, as the petrol price increased in 60 times) to neighboring Colombia to buy food and everything you need. According to the BBC, over the weekend of 16 and 17 July, more than 100 thousand Venezuelans have participated in overseas shopping.
Queuing for food caused by the machinations of the external enemies of Venezuela, said President Maduro
Photo: Jorge Silva / Reuters
26% of the GDP: the birthplace of pubs and statistics
On 12 July, the Central statistical office (CSO) Ireland has reported a record GDP growth. In 2015, the country’s economy has increased by 26 percent. In March, the statistical service estimated the dynamics of the plus 7.8%. And he and the other result is the best in the world (countries in the Eurozone, for example, showed less than two percent; India — 7.6%, China 6.9%).
The greatest contribution made by the Irish industry and construction — they grew by 88 percent. Agriculture rose by 10.3 percent. “Our economy is very small. We received this result due to the fact that the country has increased the volume of assets”, — explained the representative of the CSO Bloomberg.
Indeed, in 2015, a multinational Corporation was re-registered in Ireland to pay less taxes (max rate — 12.5%). In 2013, their assets were estimated at 391 billion euros, in 2014 — already 523 billion. The earnings of these companies were taken into account in the calculation of GDP. Hence outstanding performance.
“If the Chinese reported that their economy grew by 26 per cent, they would be ridiculed,” — commented the economist Jim Power. Data CSO he called absolutely meaningless, because the sharp rise in GDP was due to one-off factors. In assessing the economy’s expert proposed to use data on employment, consumption level and consumer mood.
Statistical office of Ireland reported a GDP growth of 26 percent. Experts have questioned such a result
Photo: Cathal McNaughton / Reuters
The British The Financial Times after the announcement of the CSO remarked that Ireland was always famous for its writers, many of their works recognized as world classics. To those must now include the report of the statistical service, ironically the newspaper. Moving corporations not associated with any increase in jobs in the country, nor the welfare of the population. The publication warned that the information about the economic miracle can only piss off the Irish, because they remember how the country requested emergency financial assistance from England, Germany and France during the 2008 crisis from which Ireland has not fully recovered until now.
100 trillion Zimbabwean dollars: a Paradise for mathematics
The head of the national Bank of Zimbabwe, Gideon Gono, in 2009, received the IG Nobel prize (a parody Nobel prize, it is awarded for stupid and ridiculous achievements) for popularization of mathematics: the whole country was diligently folded, subtracted and divided, as the Central Bank was forced to issue banknotes in denominations from one to one hundred trillion Zimbabwean dollars.
It all started with the so-called black redistribution or dispossession. The rich farmers took the land and divided it among the poor. And then passed a law according to which foreign companies in Zimbabwe should only be controlled by black citizens. Investment inflows dried up, the economy collapsed, inflation accelerated.
Gideon Gono managed the national Bank in 2003. Then inflation in the Republic reached 600 percent. By January 2009 it had exceeded all conceivable limits, accelerating to 231 million percent. Here in circulation and introduced banknote 100 trillion dollars that the people have time to buy something. It is noteworthy that the money printed expiration date. After bill turned into useless paper.
The population of Zimbabwe could learn large numbers through the issuance of notes with huge denominations
Photo: Jürgen Bätz / DPA / Globallookpress.com
At the end of 2008 on the black market for 100 thousand Zimbabwean dollars gave one American. Few weeks the rate has fallen to 16.7 million to one. Authorities spent two denominations — cut first 10 zeros, followed by 12, but it didn’t help. The U.S. dollar rose to nearly 13 trillion Zimbabwean. It ended up that the government decided on the withdrawal of national currency from circulation. Her place was taken by a stable foreign currency — the US dollar and South African Rand.
95 billion of no return: default in the rhythm of tango
The world must prepare for the largest-ever default, warned the British newspaper the Telegraph in April of last year. From the beginning of the 2008 crisis, the G7 (UK, Germany, Italy, Canada, USA, France and Japan) have accumulated huge amounts of debt reached 120 percent of their combined GDP. The catalyst of the impending disaster are bonds with a negative yield, the result of an extremely loose monetary policy of the ECB — the base rate of the European regulator is maintained at zero for the sake of stimulating the economy of the continent. The volume of issued bonds is estimated at two trillion dollars.
But the worst has not happened yet. Argentina remains a country that experienced the largest default in history. Nothing boded trouble: in the 90 years the country has undertaken reforms of the IMF recipes. Peso tied to the dollar, foreign investors received tax breaks. GDP grew rapidly, the world is told about the Argentinian economic miracle.
But the peg to the dollar was deprived of Argentine goods competitiveness. Increased dependence on imports, increased the budget deficit. To cover it, the government has gained credit. Including from the IMF. In 1999, the Argentine economy fell by four percent.
Hooked on credit resources Argentina has failed to avoid default when the IMF refused her next tranche
Photo: Reuters
In 2000-2001 there was a massive outflow of capital from the country. The people withdraw deposits in pesos and translate them into dollars. Saving the banking system, the government froze deposits for a year — take their own money can be had in limited quantities. Unemployment jumped to 20 percent.
Argentina turned to the IMF for money, but in the trench was denied. Then the government defaulted on liabilities of 95 billion dollars. In 2014, there was one default on loans to $ 1.3 billion.
$ 600 billion from bankrupt: the explosive mortgage
Becoming bankrupt is not the only state pursuing an inefficient economic policy. Private companies also exposed to financial risks. Often they are much more dangerous and can create global problems.
The global financial crisis at the end of the zero, began with the bankruptcy of the fourth largest U.S. investment Bank Lehman Brothers. For more than a half century history, the financial Corporation has experienced a lot of turmoil. 15 Sep 2008 because of too much debt she collapsed. Immediately after that, the credit markets in the US are actually closed, and us depositors rushed to withdraw their savings.
The seeds of the storm, overturned Lehman Brothers, were sown back in the 90s, U.S. banks reduced requirements for borrowers, people began to arrange a mortgage. The quality of banks ‘ loan portfolios deteriorated sharply. By 2007, about 12 percent of total US-issued mortgages that made up the 11 trillion dollars, accounted for troubled loans.
The bankruptcy of Lehman Brothers started a global financial crisis of 2008
Photo: Michael Nagle / Getty Images
The leaders of Lehman Brothers tried to capitalize on the rapidly inflating the real estate bubble. They invested in mortgage bonds (the paper was issued on the basis of housing loans the quality of which is constantly falling) and burned. The management gave the misleading comments about the real financial position of the company and have resorted to accounting gimmicks to hide problems and keep a high rating.
In March 2007, Lehman Brothers reported a profit of 1.1 billion dollars. And in August, the Bank closed the Department for work with risky mortgages and was fired over a thousand employees. In the second and third quarter of 2008, Lehman Brothers lost almost seven billion, and by September, his stock has depreciated by 90 percent.
The management tried to save the situation, promising potential buyers Barclays and Bank of America — to get rid of some assets to cut bonuses to top management (which reached $ 500 million), but they did not respond. The total amount of assets owned by the Bank at the time of bankruptcy, exceed $ 600 billion, the amount of debt has reached 613 billion.
