Chapter 1335 - Reassurance

Peace and development are the themes of the times!

This is a saying familiar to everyone in China, and it is a judgment on the world pattern and development trends.

Liu Tao's words also mean that at least in this region, peace and development are still generally applicable.

This is a kind of national will and a kind of national confidence.

In addition to war-related industries such as military enterprises and food, petrochemical, steel and other war-related industries, many companies are looking forward to war. In fact, more companies do not like war and hate war.

Because war means that a large amount of resources will be invested in the war instead of investing in economic development and construction. Moreover, war will destroy the existing order and destroy the entire production chain, sales channels, etc.

It can be said that for most people, war is a more serious and terrifying thing than the economic crisis.

Liu Tao naturally understands these people's concerns.

To be honest, the above are also making relevant preparations. After all, only by fighting can we stop the war. A slap will not make a difference. If you don’t want to start a war, but someone wants to impose war on you, then war is inevitable.

The current situation is indeed very bad.

Since Bear Stearns, the fifth largest investment bank in the United States, announced that its hedge funds would stop redemptions, it triggered investor withdrawals, triggering a liquidity crisis. This can also be said to be a sign of the full outbreak of the U.S. subprime mortgage crisis. The British Northern Rock Bank was nationalized by the British government. This was the first financial institution to be nationalized since the outbreak of the subprime mortgage crisis. It also marked that the subprime mortgage crisis had been transmitted to Europe.

Bear Stearns filed for bankruptcy and was acquired by JPMorgan Chase with the mediation of the Federal Reserve. The U.S. government's rescue of Bear Stearns marked a new stage in the subprime mortgage crisis and strengthened investors' expectations that financial institutions were "too big to fail."

As the U.S. government announced the takeover of Freddie Mac and Fannie Mae, it meant a systemic crisis broke out in the U.S. real estate financial market. As Lehman Brothers, the fourth largest investment bank in the United States, filed for bankruptcy protection, the U.S. government implemented a rescue operation and allowed Lehman Brothers to go bankrupt. It broke the financial market's expectations that financial institutions were "too big to fail" and directly caused short-term U.S. money markets. collapse.

Since the short-term money market is the most important source of financing for the U.S. shadow banking system, the bankruptcy of Lehman Brothers made the collapse of U.S. investment banks irreversible.

Shortly after the bankruptcy of Lehman Brothers, Merrill Lynch, the third largest investment bank in the United States, announced that it would be acquired by Bank of America. Goldman Sachs and Morgan Stanley, the top two investment banks in the United States, announced that they would transform into bank holding companies. The five most prominent investment banks on Wall Street disappeared collectively. .

In addition, American International Group (ALG), the largest insurance company in the United States, suffered serious losses and was eventually nationalized by the Federal Reserve with an capital injection of US$85 billion. This marked the beginning of the collapse of the credit default swap market.

It was also at this time that the crisis spread from the U.S. financial market to the financial markets of Europe and emerging market countries, and the crisis officially transformed from a national crisis into a global financial market crisis.

The crisis in the financial market also affects the global real economy through channels such as wealth effect, credit crunch, and cutting off corporate financing sources.

In 2008, there is no doubt that the economies of the Eurozone, Japan, and the United States will enter negative growth.

So much money was invested in bailing out the market, but it still failed to save the market. The economy still had negative growth. One can imagine the huge losses involved.

The three major developed economies collectively fell into recession in 2008, and the economic growth of emerging market countries and developing countries naturally slowed down significantly.

According to predictions by relevant organizations, the global economy will experience negative growth of 1.3% to 2%!

This will be the first contraction of the global economy since World War II.

A bigger crisis is now approaching, and there are four overlapping crises here.

First, large U.S. banks represented by Citibank and Bank of America have suffered huge asset writedowns; second, the U.S. hedge fund industry has been experiencing large-scale investor withdrawals; third, the real economies of developed countries are still declining. Fourth, the Central and Eastern European countries are likely to experience a financial crisis caused by the flight of foreign capital.

In fact, the Central and Eastern European countries are already in danger at this time.

Such a huge economic crisis caught the whole world by surprise.

Faced with such a huge economic crisis, countries have different choices.

Some countries choose to lie down. The economic crisis is just an economic crisis. Anyway, there is not much money to spend on bailing out the market. They just wait until the economic crisis passes and the world economy enters recovery, and things will naturally get better.

Some countries have financial resources and can proactively rescue the market, and some can be saved.

Some countries will choose war to transfer conflicts and plunder wealth through war.

This is why people in many countries around the world are worried about the outbreak of World War III.

Because this scene at this time reminds people of the Great Depression of 1929 before World War II.

Everyone is worried that this time it will lead to three wars like World War II.

Especially in Europe, this worry is particularly strong!

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Both world wars took place in Europe.

In World War I, 5.5 million Allied soldiers died and 3.38 million Allied soldiers died. Almost 20 million soldiers were injured in both the Allied and Central Powers camps. As for the civilian casualties, it was also an astonishing number.

It was also the First World War that led to the collapse and disintegration of the Austro-Hungarian Empire; the outbreak of revolution in Russia led to the birth of the Soviet Union; France suffered heavy casualties and was so heartbroken that when World War II broke out, France performed extremely poorly; the British world Hegemony has been seriously challenged.

In World War II, the casualties across Europe exceeded 35 million, and the casualties were even higher than those in World War I. The Second World War caused Britain to lose its world hegemony. Britain and France stepped down from the hegemonic level, and the world entered the era of hegemony between the United States and the Soviet Union.

If three wars break out this time, there is no doubt that the entire world structure will undergo earth-shaking changes. More importantly, because of nuclear weapons, the lethality may be unimaginably great.

This is why Einstein's famous quotes, as well as videos of nuclear weapons experiments, and the Soviet military exercise 81 documentary have been broadcast over and over again in Europe, and countries such as Sweden and Switzerland have issued radiation protection manuals.

Throughout the world, the trend of military preparation for war is rising.

Even if the United States is hit by an economic crisis, its military budget has not declined. The proportion of military expenditure in various countries is rising.

Some areas where geopolitics converge have begun to experience turmoil.

Georgia has a very distinctive feature.

Had Russia not taken decisive military measures to forcefully defeat the Georgian army and force Georgia to compromise, it would have inevitably caused a chain reaction.

But even so, the Franco-German alliance + Russia, which had been getting closer, came to an abrupt end. There was a very subtle change in attitude, and the entire Europe's alertness towards Russia suddenly increased. (End of chapter)