What is the cause of the subprime mortgage crisis in the United States

Causes and effects of the subprime mortgage crisis.

The main reason for the United States itself is the large number of printed dollars, which has caused the flood of paper money, and many countries have bought US Treasury bonds, and the whole world has been unlucky. Before the seventies of the last century, the dollar was directly pegged to **, and then the United States refused to exchange it for the dollar**, and now the dollar has depreciated by two-thirds compared to the seventies.

1. The essence of the subprime mortgage crisis is the bursting of the financial bubble in the United States, the prosperity of the real estate market in the United States mainly relies on the support of subprime mortgage financial products, and this support has a premise that real estate continues to increase in value, but this premise is not permanent, when the real estate does not rise, the subprime mortgage can not operate, and finally like dominoes, the banks are dragged across, and the banks of the world that buy these bank bonds are also dragged down, just like the Bank of China in China, which bought 9.8 billion subprime mortgage bonds. The money has basically evaporated.

2. The U.S. dollar is the world's currency, and countries around the world have exchanged most of the remaining money for U.S. dollars. The basis for this act, of course, is that the US economy is strong enough that people believe that the dollar is a hard currency and will not depreciate casually. But when it turns out that the dollar is no longer good, oscillations in the world's financial markets are inevitable.

3. The United States is the world's largest consumer, and developing countries like China are quite dependent on the United States for exports.

The main lesson of subprime mortgages is that the United States cannot be treated as a treasure, American assets were previously considered the best assets and can be purchased with confidence, and the dollar is also considered equivalent to **, these are a thing of the past.

Subprime Mortgage Crisis: The Trigger for the '08 Global Financial Crisis.

The United States is addicted to borrowing, and the subprime mortgage crisis may break out again, with nearly 3,000 tons of sought after.

Of course, the United States is the economic leader, and there are many goods from all over the world that want to be exported to the United States.

The Americans passed on the subprime mortgage crisis to other countries through international hot money, and it had an impact on the whole world, such as the domestic economy was in good shape, but it fell sharply.

To put it simply, in the context of economic globalization, capital operates on a global scale, and no country's economy develops in isolation.

Because the United States is the only superpower, does it control the economic lifeblood of the entire capitalist world? To exaggerate is to say that the world is dominant!

Subordinated debt claims are subordinated to other liabilities and are essentially no different from U.S. subordinated debts in terms of the order of claims. The difference is only in the companies that issue bonds, one is a commercial bank that issues bonds, and the other is a housing mortgage company.