Proposal to Review How Previous Instances of Global Financial Crises Assignment

Proposal to Review How Previous Instances of Global Financial Crises can be used to Forecast Developing Financial Crisis - Assignment Example These can be used to analyse how such crises could be avoided. This proposal includes detailed descriptions of my methodology for collecting data, schedule for the review as well as my relevant qualifications that make me well suited to this job. Justification of Review The twentieth century witnessed its first financial crisis early within the first quarter. Consequently, the world drifted into another greater war in an effort to gather enough fiscal resources to claim complete financial independence. (Friedman and Scwartz) The financial imbroglio is considered to have emerged as a result of loose ended banking policies. Multiple symptoms were experienced before the financial crisis in the shape of minor fiscal hiccups such as the New York Stock Exchange Crash of 1901, the banking panic of 1907, the panic of 1910-11 and the Shanghai rubber stock market crisis. (Bernanke) The final manifestation came through in the form of the Wall Street Crash of 1929 which crossed the Atlantic and caused militant ideologies to spring up throughout Europe. Consequently, the Second World War broke out which plunged the entire world into untold misery and conflict. This major upheaval was followed closely by the oil crisis of 1973 that was brought about by OPEC in response to the stock market crash of 1973-74. This crisis was followed closely by a scramble for the Middle East which has had far reaching consequences as authoritarian rules sprung up and fuelled militancy. It would not be an exaggeration to relate that the attacks on American soil on September 11, 2001 had roots in the oil crisis and its consequences. Moreover, the oil crisis of 1973 redefined the ways in which consumption patterns were organised. The escalation of oil prices encouraged the use of more efficient vehicles and promoted a drive towards more sustainable forms of energy such as LPG (liquefied petroleum gas). (Eichengreen) Other than the financial crisis listed above, South America saw the development of a debt crisis that soon engulfed the region. The problem began with the â€Å"Mexican Weekend† bank default in 1982 that served as a catalyst for the entire region’s banking systems to crash. The resulting imbroglio witnessed the Latin American debt crisis that forced these already marginalised nations to cut further spending on social development programs. Consequently, the eighties and nineties played host to the development of large drug cartels and mafias that employed the scores on unemployed youth. The resulting struggle in South America left scores dead and saw drug trafficking to the First World increase by leaps and bounds. Names such as Pablo Escobar became legends by becoming philanthropists out of drug money while millions of youth spoiled their lives around the globe using the same drugs. The onset of the nineties saw the development of financial crisis in both the United States and Japan. The high point of financial crises culminated when Japan was hit b y the 1997 stock market crash. Large names such as Casio and Yamaha defaulted and Japans’ position as the prime producer of precision goods declined. However, the financial crisis did not limit itself to Japan but spread to other parts of Asia and caused a storm of devaluations to take place. This was followed closely by the Russian financial crisis of 1998 that saw the government weakened to an extent that it could not pay off pays for its employees. Large banks collapsed and mafias