What is Economic crisis?
In 2008, a global economic crisis was suggested by several important indicators of economic downturn worldwide. These included high oil prices, which led to both high food prices (due to a dependence of food production on petroleum, as well as using food as an alternative to petroleum) and global inflation; a substantial credit crisis leading to the bankruptcy of large and well established investment banks as well as commercial banks in various nations around the world; increased unemployment; and the possibility of a global recession.
High commodity prices
Medium term crude oil prices, (not adjusted for inflation)
The decade of the 2000s saw a commodities boom, in which the prices of primary commodities rose again after the Great Commodities Depression of 1980-2000. But in 2008, the prices of many commodities, notably oil and food, rose so high as to cause genuine economic damage, threatening stagflation and a reversal of globalisation.
In January 2008, oil prices surpassed $100 a barrel for the first time, the first of many price milestones to be passed in the course of the year. By July the price of oil reached as high as $147 a barrel although prices fell soon after.
The food and fuel crises were both discussed at the 34th G8 summit in July.
Sulfuric acid (an important chemical commodity used in processes such as steel processing, copper production and bioethanol production) increased in price 6-fold in less than 1 year whilst producers of sodium hydroxide have declared force majeur due to flooding, precipitating similarly steep price increases.
In the second half of 2008, the prices of most commodities fell dramatically on expectations of diminished demand in a world recession
oil prices medium term
February 26th, 2009 at 7:14 am
The basic explanation of economic crisis is when you spend the money which you do not have and your sources can not payoff the money you borrowed and the interest.