This short animation might help you to understand one of the core problems of modern capitalism.
The term financial crisis is applied broadly to a variety of situations
in which some financial institutions or assets suddenly lose a large
part of their value. In the 19th and early 20th centuries, many
financial crises were associated with banking panics, and many
recessions coincided with these panics. Other situations that are often
called financial crises include stock market crashes and the bursting of
other financial bubbles, currency crises, and sovereign defaults.
Financial crises directly result in a loss of paper wealth; they do not
directly result in changes in the real economy unless a recession or
depression follows.
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