As the world suffers from the consequences of the Corona crisis at all levels, the global economy is yet to be hit further by the new oil price war. On Monday, the Wall Street suffered its heaviest daily loss in more than 11 years, in a decline caused by the collapse of oil prices due to the price war launched by Saudi Arabia on Russia and the outbreak of the Corona virus emerging in the world..
The International Monetary Fund warned that “the emerging Corona virus threatens the recovery of the global economy, while it was expected that global growth would achieve 3.3 percent, compared to 2.9 percent last year.”
Here are five of the biggest and most dangerous global economic crises, as reported by the British encyclopedia Britannica“:
1- Credit Crunch 1772
This crisis began in London and spread throughout Europe, when Britain created tremendous wealth through its colonial possessions and trade in the period 1760. This led to the emergence of A case of over-optimism, which led to the rapid expansion of credit by many British banks. This optimism ended abruptly on June 8, 1772, when Alexander Fordes, one of the British bank’s partners, fled. “Neal, James, Fordyce and Down” To France, to escape paying off his debts.
Then, news of the escape spread and panic spread in England, as creditors began to form long lines in front of British banks to demand immediate cash withdrawals. The case has spread to Scotland, the Netherlands, and other European countries.
Some historians believe that the economic repercussions of this crisis were one of the most important reasons for the Boston Tea Party demonstrations, which ultimately led to the independence of the United States from Britain..
2- The Great Depression 1929–1939
This crisis is considered the worst during the twentieth century, and it is believed that it started when the American stock market collapsed in 1929, and later it was exacerbated by the poor economic policies of the American administration at the time..
The recession lasted nearly ten years, and resulted in a huge loss of income, record unemployment and a lack of production, especially in industrialized countries..
In the United States, the unemployment rate was about 25 percent at the height of the crisis in 1933.
3- The oil price crisis 1973
The crisis began when OPEC members (especially Arabs) decided to respond to the US decision to send arms shipments to Israel during the 1973 war.
OPEC countries decided to declare an oil embargo and stop its exports to the United States and its allies, which led to a large shortage and a sharp rise in oil prices, followed by an economic crisis in the United States and many developed countries..
This crisis has led to very high inflation (resulting from the sharp rise in energy prices) and economic stagnation. As a result, economists called this period a name “Stagflation”That is, recession plus inflation. It took several years for production to rebound and inflation to fall to pre-crisis levels.
4- The Asian Crisis 1997
The crisis began in Thailand in 1997, and quickly spread to other East Asian countries and their trading partners.
Speculative capital inflows from developed countries to East Asian economies or a group of countries known as the “Asian tigers” such as Thailand, Indonesia, Malaysia, Singapore, Hong Kong and South Korea, have caused optimism, which has led to excess credit and debt accumulation in the economies of these countries..
In July 1997, the Thai government was forced to abandon its fixed exchange rate against the US dollar, which it maintained for a long time, due to the lack of foreign exchange sources..
This contributed In the outbreak of panic among Asian financial markets, which quickly reflected on foreign investments worth billions of dollars.
With panic spreading to the markets and investor anxiety about the potential bankruptcy of East Asian governments, fears of a financial meltdown around the world began to spread, and it took years to recover..
5- The economic crisis 2007 – 2008
The economic crisis in 2007 led to a great recession, which is considered the most severe economic crisis since the recession of 1929, and the 2007 recession has devastated financial markets around the world..
The crisis erupted due to the collapse of what was then called the “real estate bubble” in the United States, which led to the collapse of the investment bank “Lehman Brothers” in September 2008, and many international financial institutions were on the verge of collapse.
Ending the crisis required unprecedented government bailouts, and recovery took about 10 years, after the world lost millions of jobs and billions of dollars.