GLOBAL FINANCIAL AND ECONOMIC CRISIS AND ITS INFLUENCE ON NATIONAL

ECONOMY OF USA. GOVERNMENT ANTI-CRISIS

POLICY Ruhulla AbdulIFF 2-2

Moscow 2015

FINANCIAL UNIVERSITY UNDER THE GOVERNMENT OF THE RUSSIAN FEDERATION

CONTENTSA modern economic crisis: Distinctive FeaturesThe origins and causes of the crisisFinancial InstrumentsCrisis in the USAThe anti-crisis policyReferences

A MODERN ECONOMIC CRISIS: DISTINCTIVE FEATURESFor an overall estimation of the current crisis, we should highlight its three important characteristics:1. This crisis itself represents the first world crisis of global

capitalism, which happened after the collapse of the world socialistic system;

2. The current crisis serves as a crisis of the global liberalism model, pointing to the imperfection of modern economic system;

3. The current crisis can be considered as a turning point in the global economic system and in national economic models, as well as in economic science.

All these features give it the enormity and the increased level of risks

THE ORIGINS AND CAUSES OF THE CRISIS The transition of an economy to economic model focused on the achievement of short-term benefits (profits);

This is equivalent to a rapid widening of the role of speculative factors and speculative economic model in a modern market economy;

Business was considered as "making money out of nothing", and the economy became as "the economy of speculative bubbles“;

There was a separation of money circulation with the development of production-consumer sector of the economy, which increases the volatility (instability) of financial markets and of the economic system in a whole;

Creation of a global financial network weakens the connection between the world of money (finances) and the real economy;

The modern market system represents a huge amount of unsecured debts with a real danger of becoming a huge flow of paper money.

Brent barrel petroleum spot prices since May 1987. Due to exchange rate fluctuations, the real price line is only relevant to the United States and countries with a currency tied to the U.S. dollar at a constant rate throughout the period. (Source: Energy information Administration).

Today, even the real economic resources and benefits have become as a speculative instruments: oil, land, real estate, etc. This is especially true for the oil market. This can be seen in the following example:

Production of oil in 2008 and 2009

Trade of oil in 2008 and 2009 (Net exports)

Overall picture of oil trade in the world

Production Consumption

FINANCIAL INSTRUMENTS• With uncontrolled use of financial

instruments, money become the main derivative, maximally loaded with a variety of risks and inevitable inflation collapses;

• Financial markets lost connection with the production and consumer economy;

• This led to uncontrolled rise in the use of derivatives with a complete separation from their real (secured) assets;

• High risk of arising pyramid of derivatives lies primarily in their two fundamental differences from other securities:

1. their trade is mainly carried out in the mode of over-the-counter (OTC) deals;

2. there is no insurance in their turnover.

This leads to key contradiction of modern financial capitalism between the limited material resources and the ability to create virtually unlimited financial resources by expanding the derivatives market.

CRISIS IN THE USA The financial system has lost stability, losing connection between finance and production; The imbalance, even with the ability of finance capital to create money out of "emptiness", turns into a need

to use of redistribution mechanism to resolve such economic irrationality; A new model of maintaining of equilibrium in the world economy appeared. Chronic deficits in the US

economy were covered by capital surpluses by East Asian countries, and oil exporting countries; The modern American model that was developed as a model of excessive consumption financed by savings

from other countries came close to his exhaustion. This led to the use of development policy at the zero rate of domestic savings and, consequently, the rapid rise of US debt ($18.6+ trillion for 11.2015);

This new model of world economy, characterized by disequilibrium, which laid the serious imbalances in the global financial and economic system, requires a radical transformation;

All these features caused the current crisis which started in 2007 in the US mortgage market (The United States housing bubble) and then covered the whole world economy (see graph).

Until the root errors of current global speculative financial system will not be eliminated, there is a risk of emerging of large-scale crises. The way out of the crisis must be sought in the rejection of speculative model of "casino economy". Only through the weakening of speculative component and the resubordination of the financial system to work in the interest of the consumer-production and socio-economic activities a full recovery of the economy can be achieved.

THE ANTI-CRISIS POLICY1. Rejection of use of some national currency as a global reserve currency.2. The establishment of strict and transparent rules regulating the market of

complex financial instruments to the creation of monitoring areas 3. The introduction of an additional tax on all speculative transactions4. The transition to a system of fixed prices for energy5. Return to the international practice of differentiation and specialization in the

activities of financial institutions. 6. Generalization and use the experience of the Islamic financial modelThe proposed measures, of course, do not exhaust the whole package of other changes and require further analysis. But they, in my opinion, reveals the logic and direction of change in the world economic sphere, if we really want to solve the problem of the transformation of the economy to speculative-financial model.The current financial crisis has shown that there are various unresolved issues in the economy as for one state, and for the entire economic world. However, precisely because of the crisis, these problems have been identified and examined. After all, the crisis is essentially a mechanism for purification of the weaknesses of the economy. And to ensure equilibrium in the economy and further prosperity, this quality of the crisis should definitely be used.

REFERENCES Books Jacques Attali The global economic crisis. What's next? SPb.,2009. Butrin D. rules of the game // Kommersant. 2008. December 15. P. 6. Vladimir Kashin Iceland - a new friend // Vedomosti. 8 October 2008. P. 4. J. Keynes. General Theory of Employment, Interest and Money. M., 1978. McConnell CR, Brue SL Economics: Principles, Problems and Policy. In 2 vols. T. 1. M .: Republic. 1992. V.T. Ryazanov. The economic system of Russia: on the way to another economy. SPb., 2009. V.T. Ryazanov. The anti-crisis policy of the Russian Federation: strategic priorities and operational objectives // The Economist. 2009.

№ 12. V.T. Ryazanov. The global economic crisis and its consequences // Modern problems of the economy. 2012. P. Samuelson Economics. In 2 vols. T. 1. M .: NGO "Algona", 1992. L. Fedun and oil Country: // join OPEC Bulletin. 2008 November 17. S. 6. J. Hicks. R. Cost and capital. M., 1993. Sources The World crisis - http://www.mirovoy-crisis.ru/ The World Economic crisis - http://worldcrisis.ru/ The World Economic crisis - http://www.economic-crisis.ru/ The World financial crisis - http://about-crisis.ru/ The World crisis - http://www.mirkrizis.ru/ The World crisis - http://expert.ru/dossier/story/312294/The analysis of crises - http://www.crizis.org/ Global financial and economic crisis - http://www.svom.info/entry/311-globalnyj-finansovo-ekonomicheskij-krizis/ Financial crisis of 2008 and consequences for the Russian economy - http://ria.ru/spravka/20130816/956672411.html The UN and the Global financial and economic crisis - http://www.un.org/ru/development/fincrisis/ Global financial and economic crisis in Russia. Trends and prospects -

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