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Explain how the development of the Eurodollar, or US dollars created outside of the US banking...

Explain how the development of the Eurodollar, or US dollars created outside of the US banking system, both contributed to the bubble in the US stock and housing markets that led to the 2008 financial crisis, and also made the subsequent crash worse.

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The development of the Eurodollar, or US dollars created outside of the US banking system, both contributed to the bubble in the US stock markets that led to the 2008 financial crisis. The liquid funds of this market had great potential which created avalanche effect and accelarated the flow of hot money in the market. There was massive flow of money in some economies while on the other hand some other economies had no money. The capital movement which started due to the development of Eurodollar was not easy to be controlled. This eventually led to market crash.

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