A Second Financial Crisis Coming?

European economic troubles, Iceland crisis, the Greek crisis, huge shorting of euro...there are also rumors about the outbreak of Spain's debt crisis. For a time, an atmosphere of fear comes, as if the second wave of financial tsunami is about to begin.

In order to measure total economic output, Iceland and Greece are very small countries, with Greece's total GDP accounted for only 2.5% in the euro zone, so its debt crisis is not enough to shake the basis of the euro. Although the EU has no economic aid between countries, and the responsibilities and obligations, but to the stability of the euro, Germany and other EU member states will not sit back and do not save the Greeks. Iceland and the Government of Greece at this time the "bad debts" spread out, in fact, want before the end of the financial crisis, as much as possible so that other countries share a number of losses. The euro is the world's largest currency in circulation, if indeed the disintegration of the euro as a monetary union, and it will not only affect Europe, but also spread to the world, the United States and China will be adversely affected. So far, the EU does not require the IMF to intervene, and no recourse to the United States and China, which shows the danger of the disintegration of the euro has not yet, the financial difficulties of its member countries within the EU is still seeking to resolve the crisis should be resolved so is only a matter of time.

Europe's economic recovery lags for a variety of reasons. The U.S. subprime crisis triggered by the financial tsunami is the first time for the European economy. The financial tsunami has caused a sharp contraction of world trade, international trade in 2009 declined by about 12%, Europe from the beginning in March 2009, the U.S. dollar against the euro and other major currencies devalued the Yuan / dollar exchange rate between the relative stability of the RMB on the fall of the dollar's "slide", so, the two major currency devaluation in 2009, side by side on the European economy constitutes a second blow. Two-hit to make a response the European economy caught off guard, there is no strength to fight back, coupled with the expense of others among the EU member states, the European economic situation continued to deteriorate as the worse. However, the 2009 devaluation of the dollar and the Yuan's side by side to help China's economic recovery, but also stopped the U.S. economic downturn, the global economic crisis, "domino" domino effect the termination of the Sino-US economic stability will gradually transfer to the European and thus help stabilize the European economy recovery.

In contrast, China's stock and property markets two very dangerous "bubble." The United States had just blown a "bubble", with the stock market rose from 6500 points, the lowest range of the Dow Jones index to 10000 points or more. At present, China and the U.S. economic recovery is in progress, and gradually shifting to the fundamentals of economic recovery. While in the UK economy, the excess money into the bubble did not produce significant effects, the fundamentals of the recovery are not good. Therefore, the major threat to global economic recovery is not in the hustle and bustle of the European continent, but rather the quiet British economy. However, the trend shows that the economic recovery trend has been established, pessimistic rumors of the "second wave" crisis do not exist, because the consequences of the financial tsunami have taught everyone a lesson and effectively strengthened the global economy.