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Written by Florin Colceag
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Tuesday, 11 November 2008 |
Financial crises are an example of a mechanism that does not contain all the necessary components in order to generate sustainability. The trigger of financial crises may be single type cyclic phenomena - either of growth or degrowth, from a complex diagram, or the complete lack of cyclic phenomena and the existence of commutative diagrams only.
In the study of these phenomena, an analysis can be performed as to the evolution of current financial crises. The primary growth cycle, which is a generator of crisis, is represented by the chain of investment banks that increase the apparent monetary mass. If bank A receives a certain amount of money as a deposit, it keeps 10% of the sum and invests the rest in bank B, whereas bank B does the same thing with bank C, and the process goes on until the value of the investment is equivalent to ten times the initial deposit.
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