The Impact And Measures Of Financial Crisis

Began in early 2007, the U.S. subprime mortgage crisis, was originally a country within the lending credit crisis. Its impact should be limited to domestic country. However, because the United States is standing as a world economic power status, and the U.S. dollar acts as the world-leading financial system, the Wall Street elite in the United States had previously packaged these junk bonds, and had interiored in a new form of financial derivatives - subordinated to the world to sell, these bonds became known as "toxic bonds." Because subordinated debt is the use of leveraged operations, when the risk occurs when the sub-prime loans, subordinated debt also amounted to several times the effect of the subprime crisis to zoom. With the worsening subprime mortgage crisis, subprime crisis in the world's financial system began to spread, and eventually developed into the world financial crisis. This paper starts from the discussion of Marx's economic crisis, and the monetary base and other aspects of the theory, through the analysis of the underlying causes of the financial crisis, trying to find solutions to the crisis and in line with China's economic development strategy.The first part focuses on the theories of Marx's economic crisis and the monetary base theory, developed from the history of monetary point of view, monetary credit from the development of metal currency from the gold standard monetary system along with the development of a wide range of fiat money system. When the credit currency and precious metals of gold represented by the out of touch, more money is the issue of state law to determine the form. Paper-printed and issued monetary costs little, and is easy to cause the expansion of the number issued. Since the nineties of the 20th century, the issue of credit currency has been evolving, and the electronic information technology has been widely used in banks, thus making electronic money become the credit after a new form of currency, such as credit cards, which in turn accelerated the monetary expansion.The second part discussed the main reason for the financial crisis.From the beginning of the U.S. currency becoming the dollar as world currency, the United States stands as the world's largest economy for its identity of dollars to other countries, continuing to create a dollar crisis and currency devaluation. When the Bretton Woods system disintegrated, the dollar and gold are no longer linked with each other, thus making the United States more blatant. Under the dual affect of the loss of internal control in the pursuit of profit maximization and investment banks, the issuance of subprime loans were issued in large scale. In order to transfer risk, these subprime loans in the form of financial derivatives were released around the world in turn. When the U.S. real estate bubble began to burst, these sub-prime real estate loans are based on a large area of debt default, thus the crisis will inevitably occur.The third part comprehensively discussed the spreading of the financial crisis around the world and its sequences caused to the world. First of all, large areas of the financial system have paralyzed, and people's confidence towards the future has been continuing weaken and eventually transferred to the real economy. Some companies were forced to cut production, layoffs, and some enterprises in the financial crisis under the impact of bankruptcy. Until the full paper of this writing, the crisis is still not over, and it makes the world the disastrous effects of very long-term national debt crisis worse, and the production life of the people closely related to price inflation, which causes food crisis, oil crisis, causing a panic in the world economy and the delaying of the economic development in many countries or even regression.The forth part of this thesis sets out from the perspective which focuses on what measures should be taken in China to address the financial crisis. Crisis to China's financial system had little effects. But as China is America's largest creditor, foreign exchange reserves have more than $ 3 trillion ranked first in the world, thus the financial crisis on China's macro-economic impact is huge. This article mainly discussed from the following aspects: making monetary policy to prevent inflation, and to achieve the transformation of economic development, reforming of exchanging rate policy, the implementation process of internationalization of the yuan in five areas, according to the principle of seeking truth from facts to achieve objective reality, and discussed what measures should be taken in order to facilitate China's economic development.