Will US Economy go into a recession

[silent_thunder]

For all of us know that US economy is very important for the global growth to be sustained but off late due some bad decisions by major financial institutions and a whole lot of defaulters:D (Sub Prime) their economy looks weak. Some experts say that US is already in a recession.This is a bad omen for the rest of the world ,it means loss of trade(exports) of billions of dollars to the US. Today the US$1 is 42 rupees it was not long ago when it was US$45 this means a loss of Rs3 for an exporter who had agreed for an contract lets say for three years or so before the recession. So what can he do to avoid it!! I would say nothing but hope US recovers

Though India and china are less dependent on US alone now but that less is still significant.India's Growth was 9.4% and china's was 11.4% this is staggering but wait for this years result you will see the effect of US slowdown

Willl the US economy go into a recession??
If so what will be repercussion throught the world!!

[Nazreen]

Many economists in the world are saying that the U.S. is already in a recession. This I think is true because as can be seen in the news, the US economy has been down for several months now. This has affected a lot of countries in the world resulting in a slowdown in global economy.

I do disagree when you say that India and China are less dependent on the US. US is the number 1 importer of Chinese goods and as for India, US is also one of the biggest nation that is outsourcing their IT to India. So both of these economies are very dependent on the US economy. At the same time, China is still recovering from it's big expenses in the Olympics. 9 out of 10 countries who held the Olympics in the past, had a slowdown in their economies for a year or two.

[silent_thunder]

Read my post carefully I quote
Though India and china are less dependent on US alone now but that less is still significant


You should have understood the what you missed by now!!
I said india and china is less dependent now than years gone by but that less is still significant meaning a "huge part of the economy"

[Nazreen]

Read my post carefully I quote


You should have understood the what you missed by now!!
I said india and china is less dependent now later years go by but that less is still significant meaning a "huge part of the economy"

Sorry, my bad but you don't have to be so angry about it.

[silent_thunder]

I am not angry at all!!! Hollydolly be happy dont worry

[Fergal]

The US economy is certainly experiencing major difficulties. I suppose it is a technicality as to whether or not it is going through a recession. However, I would suggest that the majority of US citizens are experiencing economic tightening that they would describe as a recession.

The credit crunch in the US has had a major impact on Ireland. Irish banks have become much more cautious when it comes to lending money for property deals. This has resulted in a major slow down in the Irish property market which in turn has had a significant negative effect on the economy. Irish companies exporting to the US, there are lots of them, have also been experiencing sever difficulties because of the fall in the Dollar.

It's a cliche but when America sneezes the rest of us get a cold. So I certainly hope that the US economy improves soon. Perhaps the situation will improve after the election??

[silent_thunder]

Perhaps the situation will improve after the election??

So you think the government is responsible for the slowdown??
Well I think so the mindless spending on Wars by George bush may have added fuel to the flames, I don't know the exact amount but they would have spent nearly the GDP of Singapore or some small countries in one month of war

[Fergal]

War's are hugely expensive, as everyone knows, and are a huge drain on the economy. This has a serious impact on the financial reserves that the country has to utilise for rainy days and recessions.

A change in the political leadership will hopefully bring with it fresh ideas to stimulate the economy and lift the country out of negative growth. A political change might also help build optimism amongst the public / consumers which could have a dramatic effect on economic factors.

[tongyun]

Whether or not the United States meets the technical definition of a recession doesn't matter. What matters is that consumers are acting as if there is a recession and cutting back on spending. The recent events with Lehman Brothers and Merrill Lynch certainly have not given American's anything to be optimistic about.

[Fergal]

...What matters is that consumers are acting as if there is a recession and cutting back on spending...

Very true, economies are built on confidence. When the public loses confidence, they stop spending and their fears can become a self-fulfilling prophecy. On the other hand it would be very foolish to splash out on luxuries if you believe that there are hard times coming.

[Nazreen]

In a way you're correct tongyun. Because of people's fears, they start to panic and when one starts to panic, everyone around them also starts to panic. But who can blame them? If I were in their shoes, I would also have done the same thing and cut down on my spending. But by cutting down on spending, they're also just making matters worse for the U.S. economy.

Fear and panic is now the number one problem in the U.S. How can the government gain the people's confidence back when all people see around them are bad news - home foreclosures and bankruptcies of big investment banks?

[silent_thunder]

wow!! Merrill lynch and AIG have filed for bankruptcy this is certainly beginning look bad, the answer to question is unfolding slowly,lets wait and watch!! hehe economic expert for hire!!

[Fergal]

What's remarkable about the current economic difficulties in the US is that it is not just small companies that are feeling the pressure. Huge, established institutions are going bankrupt or requiring a government bail out on an unprecedented level (up to $106 Billion in the case of AIG).

Corporations such as Lehman Brothers and AIG were previously considered to be extremely safe and secure by most people. When such monoliths fall it sends huge shock waves through the economy and severely rocks public and business confidence.

[Nazreen]

In Singapore, a lot of people terminated their life policies with AIA when they heard about the news about the bankruptcy of Lehman Brothers and the selling of Merrill Lynch. I guess that even here, people don't have any confidence in American companies anymore.

I think that this is caused by fear of losing money. MAS (Monetary Authority of Singapore) has given an assurance though that AIA S'pore has enough assets and international insurance companies are required to set aside insurance funds locally, separate from it's head offices.

[tongyun]

And all these failures of major companies doesn't add to consumer confidence which is already low. Personally, I believe that consumers started thinking in recession-like terms when gas prices started to increase during the summer. Since people still had to drive to work, consumers had to cut back in other areas of their lives in order to pay for gasoline. Not everyone lives in a city was a mass transit system.

[daveking]

Yes, The US is slow down, I can feel it cause I export a lot to US and EU, US is slow down this year but still bigger enough ... ahaaa...

[sanketp]

us economy is certainly going down even though global fuel price is going down for past weeks

[Fergal]

Many economies are now experiencing the difficult economic situation known as stagflation. This is when there is inflation even though the economy is in decline or stagnant.

Stagflation is different to normal inflation which occurs during good times because of increased levels of demand.

[silent_thunder]

Many economies are now experiencing the difficult economic situation known as stagflation. This is when there is inflation even though the economy is in decline or stagnant.

Stagflation is different to normal inflation which occurs during good times because of increased levels of demand.

thanks for that information fergal!! Thinking of which I should create an thread about inflation!! I know what are the types of inflation I think that will be a nice share

[Fergal]

...I should create an thread about inflation!! I know what are the types of inflation I think that will be a nice share

Please do, that would be great.

[silent_thunder]

which category should I create the thread on?? fergal I am confused

[Fergal]

Start it in this one Silent. Once I see the thread, I'll move it to a different category, if need be.

[jigyasa]

Being from India, I can tell you one thing. US economy's dwindle has a major effect in India. The hiring of fresher employees has become alarmingly low. Many big players have sacked a lot of employees. And the recent sinking of the US banks has added more to the misery.