Any crisis can not have certain dates. There are many factors that bring the economical system to its extreme measures. Poor people become poorer and in this case, rich people become less rich. You won’t be able to spend money in Las Vegas or Macau. Though, if you love gambling you can test your luck in a cheaper way by playing the online slot machines Canada.
The crisis is a very complex process of comprehensive understanding. Almost no one has predicted the crises of 2020 and 2022. If we describe this logic in a simplified form, then the essence will be as follows.
In simple economies, only profitable businesses can exist. The scaling of which occurs at their own expense. This is a long and inefficient process. It is also complicated by the political turbulence that accompanies such economies. Roughly speaking, the profit of any company can be reset at any moment and everything will have to be started anew. As a result, getting out of this state is very difficult.
As the economic system reaches stability, more sophisticated instruments of business financing appear. They can be from bank loans to the stock and debt markets.
The more stable the economic system, the more often businesses rely on external financing and the more sophisticated tools are used. This allows you to build more complex business processes. They do not provide immediate profit but allow you to capture larger markets and produce more complex products. No company funded by its own funds can compete with a company with access to large amounts of external financing.
Crisis Over Again?
In the limit, this leads to the fact that obtaining the maximum amount of external financing turns into an end in itself for companies. Only it can ensure the capture of the largest markets. The more funding the company managed to attract, the more chances it had to become a major monopolist in its field. At the same time, in order to knock out potential competitors from the market, dumping strategies are used. The loss is compensated from the funds raised. This is the inevitable result of the whole process. only such companies as a result retain the ability to stay on the market. All others are squeezed out by dumping financed big capital.
After the market has come to such a state, its collapse is a matter of time. Only a small fraction of unprofitable companies are able to eventually reach an operating profit. The financial system begins to collapse under the weight of debts that cannot be repaid.
Further, the system has two exits. One is an uncontrolled chain of defaults and another one is the issue of unsecured money. The obvious choice here is the second one. It allows the collapse to be carried out according to a milder scenario. However, this does not cancel the collapse itself, because of unsecured issuance. Although less destructive than defaults destroys established business models and throws the system back to one of its previous states. Then this cycle may start (or not start) again.
