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The fixed change rate system broke down in 1971, leading to flexible and volatile exchange rates.
The oil-price shocks starting in 1973 were accompanied by high inflation and wild swings in interest rates.
On Black Monday, Oct 19, 1987, U.S. Stocks collapsed by 23%, wiping out $1 trillion in capital.
The drive toward monetary unification in Europe was stalled temporarily by the blowup in the European monetary system in September 1992.
In the bond debacle of 1994, the Federal Reserve Bank, after having kept interest rates low for 3 years, started a series of six consecutive interest rate hikes that erased $1.5 trillion in global capital.
The Japanese stock price bubble finally deflated at the end of 1989, sending the Nikkei index from 39,000 to 17,000 three years later. A total of $2.7 trillion in capital was lost, leading to an unprecedented financial crisis in Japan.
The Asian turmoil of 1997 wiped off about three-fourth of the dollar capitalization of equities in Indonesia, Korea, Malaysia and Thailand.
The Russian default in August 1998 sparked a global financial crisis that culminated in the near failure of a big hedge fund, Long Term Capital Management.
Risk comes from many sources. Risk can be human-created: business cycles, inflation, changes in government policies and wars.
Risk occurs from unforeseen natural phenomena, including weather and earthquakes.
