Financial crisis in spain (english)

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  • Publicado : 26 de mayo de 2010
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INTRODUCTION: THE GLOBAL CRISIS
The financial crisis that started in 2008 has its origin in the United States of America.
The main factors that caused the crisis were:
-The high prices of the row materials.
-The over valuation of the products.
-The worldwide alimentary crisis
-The high inflation in the whole world
- The subprime mortgages.
The crisis in trust on the marketsThe Argentinean president said in her fist speech in the 63th meeting of the general Chamber of ONU, that this crisis is a “jazz effect” because the origin of this crisis was the center of the United States, and it got spread to the rest of the countries in the world: which is one of the main differences with the previous crisis, that started in countries in development, and got expanded to thedeveloped countries, as happened with the “tequila effect” and the “rice effect.
The crisis started in 2008 was denominated by many international specialists as “the crisis of the developed countries” because their consequences are mainly observed in the richest countries in the world.
Those factors we were talking about also affected the Spanish economy, so we will summarize them since they arecommon to all economies.

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THE HIGHT PRICES OF THE ROW MATERIALS
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The decade started in 2000 was witness of the increase of the prices of the row materials, after the decrease they sufferedduring the period 1980-2000; but in 2008, the increase of the prices of those row materials (specially the increase of the price of petrol and food) started to cause really important damages in the economy, threatening with hunger, Stagflation and the stagnation of the globalization.
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In January of 2008 the price of the petrol exceeded 100dollars per barrel, which was the maximum along the history. In July it reached 147 dollars, as a cause of speculative phenomena with high volatility that generated a strong decrease of the price of the barrel of petrol during August.
A similar story happened with the industrial materials: a good example of this is copper, which was experimenting a vertiginous increase of its valuation since 2003(specially because of the high demand coming from the emergent economies like China and India) added to other factors like less quantity of extracted cooper and the conflicts with workers in this sector in Chile (the main exporter country of this material in the world). In January of 2008, the valuation of the copper in the London Metal Exchange exceeded for first time in the history the price of8.000 dollars per ton. At the begging of July, it reached 8940 US dollars per ton; absolute record in the register of the valuations in the LME since 1979. This historical value was 272.5% higher that its absolute previous record of 3.280 dollars per ton registered in January of 18989.

SUBPRIME MORTGAGES
The Crisis in the US, the biggest economy in the world, started with the subprime mortgages,that affected the Real State bubble, that was being suffered there, plus a really low value of the dollar. This subprime crisis with the mortgages had a really big impact in Spain, because we experimented a boom in the construction sector that was taken mistakenly by politicians as a long term change in the economy (and not as a boom), this means that our main sector in which the General BudgetOf The State was based on, bankrupted, This is the reason why we will pay special attention to this problem in this essay.
As we said, the construction sector was going through an expansive period from 1998, the longest in 40 years. This expansion had as a consequence a huge increase of the prices of the Real States, which forced many families to get really big debs in order to buy a home, and...
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