Collapse Of The Us Mortgage Crisis

1709 WordsMar 22, 20177 Pages
During 2008, a series of economic disasters led to a worldwide debt crisis. All over the world, interest rates were at a record low. These low rates “fuelled domestic spending and spurred inflation in wages and goods” which encouraged people to take out loans and spend money they did not have (The Causes: A Very Short History of the Crisis). These easy credit conditions led to a debt bubble that inevitably burst with worldwide consequences. Following the collapse of the US mortgage market, Lehman Brothers filed for bankruptcy. Although Lehman Brothers was based in the US, they served as a worldwide investment bank with a large European contingent. Their collapse, along with the enormous amounts of worldwide debt, led to what is now known…show more content…
Through a combination of economic strength and a philosophy of conservative spending, Germany single-handedly saved the European Union during the 2008 recession. For the past decade, Germany has maintained an economic advantage over other countries in the euro zone. Its GDP has been constantly growing and it continues to tower over its neighboring countries. In 2011, Germany’s GDP “grew by 3.6%” while the rest of the euro zone “fell short of 1%” (German Business: A Machine Running Smoothly). One main reason for Germany’s economic growth is manufacturing and exporting. Germany is the largest exporter in Europe and the second largest around the globe. It has a very efficient system of manufacturing products that are in high demand in the world’s richest countries. Cars, chemicals, machinery, and consumer goods are Germany’s primary exports, and China is one of their biggest customers. In December of 2011, Germany managed to sell “5.4 billion euros” of goods to China, topping the “5.3 billion euros of exports to the U.S” (Black). All of Germany’s exports maintain a global appeal. They make specialized products that have a large and growing market. In fact, it is estimated that the total value of Germany’s exports in 2012 was just shy of $1.5 trillion, and that exports make up 52 percent of Germany’s GDP (EW World Economy Team). So on one hand,
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