Here is how you can prepare to protect your assets in the next big crash and come out ahead. How is this financial crisis different from the past?Photo by Ehud Neuhaus on UnsplashThroughout the progression of the world economy, there has been a multitude of times in which the economy has undergone crises that have come close to crippling the foundations of business in the world, especially in North America. One of the most noteworthy financial crises was at the start of the 19th century with the 1907 bank failure. During a \u201csix-week stretch, starting in October 1907\u201d (James), the New York Stock exchange had fallen almost 50% from its all-time high. Consequently, there was an ongoing run on banks, where depositors withdrew their capital due to the fear of failing to function appropriately.The panic had ensued due to shrinking market liquidity and dwindling depositor confidence. One reason for this result was the failed attempt of two businessmen to \u201cbuy up shares of a copper mining firm resulted in a run on banks\u201d (James). Banks who leveraged the cornering scheme then suffered a run on banks leading to a compounding fear effect. This failed bid led to the downfall of the Knickerbocker Trust Company, a massive institution at the time. This caused panic amongst the country as vast numbers of people withdrew their money from their affiliated banks.The solution to the crisis came in the form of J.P Morgan, who pledged a large quantity of his wealth along with other financiers such as John D. Rockefeller, who \u201ccontinued orchestrating deals to bring confidence and liquidity back to the financial markets\u201d (James).Like the 2008 credit financial crisis, another recession that occurred was the 1980s bank crisis. It was the 1979 energy crisis that was caused due to the Iranian revolution resulting\u2026<\/p>","protected":false},"excerpt":{"rendered":"
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