Premium Essay

The Debt Bomb

In: Business and Management

Submitted By brownc531
Words 497
Pages 2
The Debt Bomb After reading the article “The Debt Bomb” by Louis Hyman, I will say that the Great Depression was a serious all around economic depression in the years 1929 through 1939 going into World War II. The timeline or timing of the Great Depression was different across nations, but in most countries it started in about 1929 and went on from the late 1930s through the early 1940s. It was the most widespread, longest and deepest depression of the 20th century. In the 21st century, the Great Depression is normally utilized as an example of how far the world's economy can come down. The depression started in the U.S., starting with the stock prices falling that began around September 1929 and became worldwide news with the stock market crash in October 1929. The Great Depression had demolishing effects in countries poor and rich. Tax revenue, personal income, prices and profits were dropped while international trade plunged by more than 45%. Unemployment in the U.S. rose 20% to 25% and in some countries rose as high as 30% to 35%. Cities from all around the world were hit very hard, especially those dependent on industry that was very heavy. Construction was basically stopped in many countries. Rural areas and farming suffered as crop prices fell down by approximately 55% to 60%. Facing demand with very little alternate sources of jobs, areas dependent on primary sector industries such as logging, cash cropping, and mining suffered the most. Some economies started to recover by the mid-1930s. In many countries, the negative effects of the Great Depression went on until the start of World War II. If we compare the 1930’s with the Crash of 2008 where gold went through the roof, it is clear that the US dollar on the gold standard was completely different to the free-floating US dollar currency we have today. Where many people have seen and experienced inflation...

Similar Documents

Premium Essay

Wwii

...During 1939 to 1945 World War II was considered the bloodiest conflict in history. Seeds of the war were sown in the Treaty of Versailles which ended World War I. The Treaty was signed on June 28, 1919. This was negotiated among Allied powers with little participation by Germany. Boundaries and assigned liability for reparations with the five years of enforcement, the French assented to the modification of important provisions. The provisions were that Germany agreed to pay reparations under the Dawes Plan and Young Plan. However this was canceled when Hitler rise to power and destructions. What events brought the use into WWII there were a couple of things leading up to the involvement. One would be Germany had a plan to try to prevent Britain from getting their supplies for war by using unrestricted submarine ware force or known as the German U-boats. Allied ships were the only ones being sunk by this however, the “Lusitania” held large amount of passengers and many of them died. At this time the US threatened to go to war but due to Germany backing down. Germany attempted to bargain and started up sinking ships however, this time was allied and neutral ships. Another event leading up to the involvement was the economy downfall due to the stock market collapsing in the 1900’s. With the problem it just increased the tensions which lead up to the fight between Communist and Nationalist. With Adolf Hitler’s National Socialist (Nazi) party coming into power which we...

Words: 2027 - Pages: 9

Premium Essay

Buffet

...Warren Buffett said Wednesday the threat to not raise the nation's debt limit "after you've already spent the money" is a "political weapon of mass destruction" comparable to poison gas and shouldn't be used by either party. "I know it's been used in the past, but we used the atomic bomb back in 1945 but we decided we weren't going to do something like that again," he said hours before the government's midnight deadline to raise the debt limit or possibly default. Buffett called on both sides to pledge not to use the debt limit as a weapon. "There are plenty of weapons that can be used," like filibusters, he said. In a live interview on CNBC's "Squawk Box, the Berkshire Hathaway (BRK-A) chairman said he doesn't expect the U.S. will do anything to damage its 237-year reputation of paying its bills on time, but if it does it would be a "pure act of idiocy" and "asinine." Buffett said Berkshire owns short-term Treasury securities but he isn't worried about getting paid. (Read more: Berkshire Hathaway's 15 Biggest Stock Holdings ) He also said the ongoing crisis in Washington over spending and the debt limit is no reason to avoid buying securities, pointing out that Berkshire subsidiary Marmon Group just paid $1.1 billion for a British drinks dispensing business. "We did not buy it with a condition that we could call off the deal" if there was no vote to raise the debt limit, he said. (Read more below the...

Words: 256 - Pages: 2

Premium Essay

Student Loan Debt

...Obstacles include but are not limited to the ability to finance a college education, and maintain that debt throughout the life of the loan. As presented in the USA TODAY article Millenials’ ball-and-chain: Student loan debt, “What's holding them all back: tens of thousands of dollars in student loan debt. Like countless Millennials across the country, they find themselves tethered to that debt load, stuck between the desire to...

Words: 2442 - Pages: 10

Premium Essay

Should War Be Obsolete

...On August 6, 1945, and August 9, 1945, two atomic bombs were dropped on Hiroshima and Nagasaki changing the world forever. These bombs symbolized strength and power to all of the world. The U.S. not only won but, established dominance throughout the world. This war brought many jobs and helped bring the United States out of the Great Depression. It brought not only jobs for the soldiers, but for the makers of the weapons and ammunition that was supplied. On September 11, 2001, United States witness a terrible tragedy. The World Trade Center the tallest and most elegant towers were destroyed in a matter of minutes . On September 22, 2001, George W. Bush declared war with Iraq (George W. Bush). Our nation sent millions of soldiers to...

Words: 1186 - Pages: 5

Premium Essay

Duck and Cover

...The face of war changed when we dropped the Atom Bomb on Hiroshima and Nagasaki. It showed the world that we had the most powerful weapon in the world, so powerful it ends wars.   The terrorist attacks on 9/11 caused so much fear that the United States declared war on terror but nobody saw it coming. We as a country vowed to never be that vulnerable again but in my opinion it still seems as if no certain drastic measures have been taken to be better prepared for another attack on U.S. soil. The threat of nuclear attack and the threat of a terrorist attack are the same. Both types of attacks were based on the element of surprise. The similarities of both are fear. Fear is a strong motivator it can motivate countries to declare war or to surrender a war. The differences between a nuclear attack and a terrorist attack are few. The first difference I see is that terrorist attacks...

Words: 440 - Pages: 2

Free Essay

The World Is Flat

...Greece is one of the smallest economies in Europe, however between the technological ease of information of the Greek economies woes being broadcasted incessantly and the interdependency of the European and other world markets, what was once a regional concern about the amount of debt amassed by a small economy has rapidly turned into a worldwide economic contagion. “Worries that over indebted Greece could default sent investors scouring for the next ticking debt bomb. The euro zone has quite a selection to choose from: Portugal, Italy, Ireland and Spain, which, along with Greece, form the aptly nicknamed PIIGS. Yields on the sovereign bonds of Portugal and Spain have already risen, a sign that investors believe holding their debt is becoming riskier.” (Schuman, http://www.time.com/time/magazine/article/0,9171,1987598,00.html) Greece’s economic turmoil combined with other EU member states poised to default has caused a global unease that endangers the recovery of the United States market as well. The U.S. was finally seeing some signs of growth after a trying recession but now fear is back with a vengeance. On May 6th, 2010, amid simulcast images of rioting in Greece against the austerity actions, this fear bounced across the world as traders cast off bonds and blue chips with equal abandon and the U.S. stock market briefly plummeted by almost $1,000 points. In addition, this air of anxiety has...

Words: 472 - Pages: 2

Premium Essay

Warren Buffet

...Still, he wasn't afraid to take on the dysfunction in Washington and said it was "so stupid" to even think that the U.S. could default on its debt. Highlights from Buffett's time on stage: On the fight over the debt limit: * "We have spent 237 years since 1776 building a reputation as the most wonderful country on earth, and one that's entrusted with having the reserve currency of the world. ... That is being put in jeopardy now and it could be destroyed in a little while. A great reputation is like virginity. It can preserved, but it can't be restored." * "The whole idea of a debt limit is a terrible, terrible mistake. If you're going to spend more than you take in, what are you going to do except raise the debt limit? So it becomes this political weapon of mass destruction. It really is like a nuclear bomb. It's something that maybe you talk about but never dream of using." On the economy: * "The country’s coming back. You can’t stop the United States. We get through everything." * "I’ve filed a tax return every year since I was 13. The last decade has been about the lowest tax rate. It was tougher when I was selling shirts at Penney’s." On women: * "People in power don’t give it up easily. And to some extent, it just doesn’t surface much. Look at how far the country came using half of its talent. Think of what we can do using all of it."  * "I...

Words: 505 - Pages: 3

Premium Essay

Ttre

...Can Stringer stop Sony malfunctioning? Sony has ditched its chief executive and brought in the head of its American division to run the media and electronics conglomerate. But resolving the conflicting aims of its two main businesses may take more than a fresh face at the top IN HIS efforts to revive the flagging fortunes of Sony, Nobuyuki Idei was widely credited with embracing western business practices. On Monday March 7th the giant corporation’s boss found himself on the wrong end of a western business practice that is rarely encountered in Japan. He was nudged aside, along with his deputy, presumably for his inability to improve the fortunes of a firm that has failed to make the various prongs of its business pull successfully in the same direction. During Mr Idei’s five-year tenure as chairman and chief executive, Sony’s share price fell by around 60%. Mr Idei’s replacement is Sir Howard Stringer, the Welsh-born boss of Sony’s American operations. His appointment gives him a position in Japanese business unmatched by any other foreign national—indeed, some even speculate that it marks a turning-point for the Japanese boardroom. Sir Howard is likely to apply a far more powerful dose of American-style management to the ailing behemoth. But finding a way to align the competing concerns of the different parts of the Sony empire may prove beyond even the sharpest businessman. Sony is essentially a firm of two parts: electronic goods and media content. It was......

Words: 10926 - Pages: 44

Free Essay

Mimi

...ETHICS IN ACCOUNTING: THE WORLDCOM INC. SCANDAL Conf.univ.dr. Lucian Cernuşca “Aurel Vlaicu” University, Arad, str. Piaţa Sporturilor, nr. 10, bl. 25, apt. 7, 310167 Arad, Phone: 0730468534, luciancernusca@gmail.com What is ethics? What does ethics have to do with accounting? How does a scandal affect the business environment and the society? This article will explain just those questions by analyzing a “famous” fraud scandal: WorldCom Inc. The article discusses the chronology of events that lead to the WorldCom Inc. collapse and explains how the figures were manipulated for the owners’ interest and what the accounting scam was. The article ends with the consequences of the scandal and what the effects were on the society and business environment in general. JEL Classification: M4 Accounting and Auditing Key words: ethics, accounting, bankruptcy, WorldCom Inc., expenses. What is ethics? Why ethics in accounting? Ethical values are the foundations on which a civilized society is based on. Without them, the civilization collapses. In business, the purpose of ethics is to direct business men and women to abide by a code of conduct that facilitates public confidence in their product and services. In the accounting field, professional accounting organizations recognize the accounting profession’s responsibility to provide ethical guidelines to its members. Ethics must and should be taught. People are not born with the desire to be ethical or be concerned......

Words: 3896 - Pages: 16

Premium Essay

Wwii

...World War II: Its Causes, Effects, and the Aftermath An American Story History 202 Matt Shaffer July 22, 2010 Known as one of the bloodiest wars in world history, World War II brought about many new changes of how wars are fought and had a great impact on humanity. More than 50 countries were involved in the war, and the entire world felt its effects. World War II killed more people, was more expensive, and created more drastic changes in almost every country than any other war in history. Tactical warfare was greatly influenced, as well as the major player for the center of world power. Following World War I, the United States conquered the entire world market of food and industry. Germany, Japan, and Italy became anxious to expand and increase their power, and they felt as though they were at a disadvantage in trying to compete with other countries for world markets. These three nations felt that other nations unjustly controlled the majority of the world’s wealth. As a result, they began to find lands to take over that they believed to be their cut of the world’s resources. In helping on doing so, military leaders in Japan took over the government, and Adolf Hitler became the chancellor of Germany. By 1939, there was an all out war in Europe (“Stanovov,” 2000). In America, people were divided on their opinions of the United States involvement in the war. Most wanted the Allied nations to prevail; however, they also wanted the U.S. to stay out of the war.......

Words: 1764 - Pages: 8

Free Essay

Report on Inside Jod

...In the old system loan money went to local Lenders, but in the new system lenders sold their loans to investment banks creating Collaterized Debt Obligations (CDO), the investment banks then sold the CDO’s to investors to all over the world. Now went home owners pay their mortgages money goes to investors all over the world. The purpose of the Grading companies was to grade how good these investments were, but at the same time they were pay by the investment banks, creating a ticking time bomb. Lenders did not care whether the loan can be paid or not, so they started to make risky loans, investment banks did not care either because while they more CDO’s were sold, more profit they will make. During 2000 and 2004 mortgages quadruple. This risky loans known as subprime loans were preferred by banks because they carried higher interest, and their employees did not care of the well being of the institution. This led to a massive increase in predatory lending, borrowers were needlessly place in expensive subprime loans, and many loans were given to people who couldn’t repay...

Words: 324 - Pages: 2

Premium Essay

Credit Crisis

...They created a “novel” way to make money by purchasing and selling CDO (collateralized debt obligation). At the beginning, the mortgages were only given to people with good credit records and strong ability of repayment. Everything was good until the occurrence of sub-prime. Include house owners, lenders, bankers and other financial institutes, everybody gained in the process of selling CDOs. In order to sell as many mortgages as possible and make more money, the mortgages were started to give to people who actually don’t have the ability to buy a house. The time bombs were buried here. Actually, the lenders and investors had realized the default risk of sub-prime mortgages, so they charged these people higher interest rates. In addition, they seem to naively believe that the house value was always rising, so the raised value would cover the default risk, which is exactly the foundation of the dangerous CDO building. However, masked by the...

Words: 620 - Pages: 3

Premium Essay

Historical Events That Changed the World

...Movements such as woman suffrage, events such as dropping the atomic bomb, and social eras such as The Harlem Renaissance still play an important role in the lives of Americans today. World War I laid the foundations for the political and economical crisis that was soon to follow. Even before the end of the war, Allies claimed reparations from Germany, whose economy was destroyed. Wilson, after meeting with the Big Four, slowly began to accept the idea of reparations. Once implemented, the American banks were now beginning to profit greatly from loaning to both Germany and the Allies- Germany who had to pay their reparations and fix the infrastructure of the country, France whose infrastructure was destroyed and Great Britain, who had to pay back America for all the ammo and weapons they had bought. Germany entered a never-ending debt cycle- repaying the allies by taking out loans, then repaying the loans by taking out even more loans. Germany’s dey, white-male supremacy, emerged a new world- where evolution was taught, radio and movies became the main source of entertainment, where blacks were treated more as equals and less as scum, where women received voting rights and labor benefits, where California became the economic powerhouse. The era has set the economic and social values of which we live by today, as well as many political...

Words: 371 - Pages: 2

Premium Essay

Hotel

...In 2008, a massive bomb blast has hit the Marriott Hotel in Pakistan's capital, Islamabad, killing at least 40 people. These incidents could result in lower check-ins at Marriott hotels which will affect the company’s business and reputation in the long run d) Capital Structure Risk 8)-8) 8) Even through it’s a feature for the hotel...

Words: 395 - Pages: 2

Premium Essay

United States Should Stop Acting as a Policeman for Other Countries

...United States Should Stop Acting as a Policeman for Other Countries The race to become the global dominant leader has intensified over the past couple of decades. It is common practice of human nature to overpower the weaker one and show power to dominate and to exploit. The first human war dates back thousands of centuries back and ever since wars and battles have continued between different tribes, races and countries. In a nutshell we could say that almost all of the wars were fought to dominate and gain superiority over your opponents. In the 20th century a new terminology termed as “Global Leadership” has emerged onto the global scenario. This policy has been one of the most crucial yet the most secrete policy of America. Ever Since United States of America won the World War 2, the desire to control and dominate has been constantly increasing among the Americans. The question of whether the United states should act as a policeman for other countries has been long debated over the past couple of decades, On one side there are people who support the quest of Usa being given the role of the world peace maker and on the other majority are those who question; “Who is USA to control or act as a policeman for other countries?” History of wars to dominate other cultures, creeds, races and nations goes back to thousands of years. As over the centuries resources have become limited and the fight and the desire to control the world’s resource has intensified. Relations......

Words: 4602 - Pages: 19