Many ardent investors have problem asked themselves one time or another: what is a financial crisis? We’ll we’ll take you through the five worst crises imaginable, economically speaking. It doesn’t matter whether a country has a state-controlled economy or a free market economy, everything is centered around the circulation of money; that’s basic Econ 101.
Since ancient times, when people were producing, supplying and distributing goods, the modern-day concept of an “economy” slowly arose, and much like many phenomena that arc over centuries, this process has become more and more complex.Now, the first to give birth to the concept of an economy as we know it today were the Babylonians, a society that developed an economic system with laws of debt, legal contracts and codes of law related to business and private property. To understand what a financial crisis is, it’s important to understand this fact.
Photo Credit: Daniel X. O’Neil
So, as we can see the philosophical idea of what makes up an economy–big or small–has a very long history. Despite everything, though, it still remains a system, and like all systems, there are always kinks, rocky patches, and problems along the way.
We all have witnessed one of these problems that has happened very recently, what many now call the “Great Recession,” beginning in 2008. However, economic history knows many other downturns, some of which were worse than the most recent crisis.
We have gathered world’s five worst economic collapses of all time. Let’s get a bit closer to understand just what exactly a financial crisis is.
See the list: