You would have heard about the most recent global economical crisis, which is also the worst in the whole entire history of Singapore. But what could have caused this? A crisis that caused even the largest of companies to close down, even whole countries are on the verge of bankruptcy. How did all these happen? You can say that it's a chain reaction. It all started with banks.
Some banks in the US just loaned money to whoever wished to borrow. They didn't check their job status or their ability to return the loan. So more and more people loan money from banks to buy houses and others. Then came the problem. They couldn't return the loan. So they all go bankrupt. Now since ALL those people loaned the money and never returned, the bank suffered a great loss and soon, it had to close down.
What happens when banks close down? All the money which people saved in the bank over a period of time will be gone overnight, resulting in more bankruptcies. The market then became unstable and investing companies soon feel the pressure. Companies like AIG, Lehman Brothers are all in trouble. Lehman Brothers even closed down while AIG is on the bail! After people see that even the biggest investing companies close down one by one, they become afraid, afraid that they would lose money too so they dare not invest anymore.
So with no investments, companies lack the funds to carry out processes so they have no choice but to retrench workers t save money.
That is how the global economical crisis came about, with the little mistake of the banks, come the worst economical crisis the world has ever seen.
It is true that the economic crisis has caused retrenchment of jobs, lower salary, closing of shopping mall etc. This is a vicious cycle that might never end. Singapore is trying to stay afloat in this crunch. Iceland has filed for or is about bankruptcy too! I hope that Singapore will not suffer the same fate as Iceland and that Singapore will emerge stronger and better when the crunch is over. I have learnt to use my money wisely and use money on what we NEED, and not what we WANT. I am happy to see that Singapore is initiating the Budget plan for the Singaporeans so that we will not suffer as badly as other countries. I hope that the economic downturn will stop once and for all..... Check my blog and comment on it. Thanks.
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