Initially we all use to read in books that in an economy money changes hands but never escapes from the system but, thanks to media, now everyone knows that all the recession, job cuts, company lockouts/bankruptcies are caused due to credit crunch in the financial system. But a very few people know what actually credit is and how credit shortage can trigger an event like recession. I also tried to explain in my previous posts regarding sub prime crisis, countries queuing for IMF loans etc. But below you can see an animated video which explains how it all happened in visualized manner.
I would like to thank the creator of this video who took this effort to explain such complex things in a simple manner