Economists blame China for global crisis. It was China that overheated the global financial market in 2000, which led to the global crisis in 2008. Even then, back in 2000, China accumulated a solid foreign exchange capital thanks to a boom in industry and corporation control over foreign exchange earnings, which subsequently invested in securities of the countries of America and Europe. China literally flooded the world financial markets of developed countries with money to such an extent that loan rates fell to record lows. What led to the catalyst for the US real estate bubble. This allowed all American housewives to own their own homes. The Federal Reserve System reacted late to such an overheating of the financial market and did not have time to strengthen monetary policy. Ultimately, the entire system collapsed in the fall of 2008. Economists warned before the crisis that Americans were spending their money unwisely. And in the system of finance and the economy in the United States, imbalances are growing rapidly. In 2000, expenses increased, which were paid for by loans taken on the security of real estate. Residential property in the United States in 2009 a quarter was under the security of bad credit. Ordinary consumer loans were also at the peak of popularity. The swiftness of George W. Bush’s policies added to the problems with the introduction of tax breaks, and sovereign debts turned into consumer loans. The country was also under pressure from increased spending on the conduct of two wars. In theory, Bush’s policy should stimulate the growth of the economy, which would pay all the costs, but it did not work.
Who, if not China, paid for Bush’s tax breaks, consumer loans to the population, as well as the costs of two wars. China-U.S. Bilateral Trade Deficit Triples. At the same time, Chinese economic growth was accompanied by an increase in the savings rate. China spent these norms on the acquisition of fixed income assets – treasury bonds. Therefore, in the global economy, the total volume of debt securities that are in circulation increased. All this led to a sharp decrease in rates in the market for funds borrowed. The Federal Reserve gradually lost control of long-term interest rates. Due to this, it was not difficult to get loans, which at that time were very cheap. China and other developing countries paid for them. Despite the high debt of developed countries, including the United States, the rate remained record low. This state of affairs in the economy and low inflationary expectations confused investors. However, this behavior of investors, as well as sovereign funds, can be understood, which continued to buy US bonds. The Chinese economy is much larger and this distinguishes China from developed countries. Increasing the economy and the volume of reserves China was able to have a decisive influence on the US financial system. Thus, the Chinese unwittingly drove the world economy into crisis.
