QUOTE (monsta666)The British economy is facing hard times. That cannot be denied, but I think some of the earlier statements that the world is facing a 30's style depression is somewhat exaggerated. Yes it is true, the current economic crisis is bad but then the 70's and even late 80's/early 90's crash were bad also.
Nah, you're far from the truth. There have been no huge banks collapsing, merging or being nationalized anytime since the 30ies. Large companies have not gone bankrupt overnight, unemployment has not risen so sharply for as long as anyone can remember. Tax fraud and tax havens have never been adressed with so much political determination.
Everyone in the West is strapped for money and investments !
Every serious econmist warns about a crisis of unprecedented severity. And the political world has taken the measure of the problem, otherwise they wouldn't pour stimulus after bailout after rescue money into the economy.
IMHO, today's crisis is to that of the early 90s what generalized cancer is to a summer cold.
QUOTE (monsta666)Saying all that it is not all doom and gloom. Some forecasts state the rate of decline is decreasing. In other words, people expect the economy to decrease by a lower rate in the next quarter (say 1% as opposed to 1.5%). Now I know that predicting the economy is notoriously difficult but I think the economy (the British economy at least) will reach it's lowest point sometime in October 2009.
Well, I sure hope you're right, because I'm currently unemployed and eager to work.
But some people say that the situation is even worse in Europe than in the US; it's only presented differently.
Besides, they say that the stimulus plans in Europe are meager compared to the Obama initiative: 5% of GDP in the US to be compared with 1.3% in UK, 0.8% in France and only 0.4% in Germany.
Also - don't hope that UK will start growing while the Eurozone is still in decline.
Sarkozy gave some of this rubbish in one of his TV speeches : 'I hope that France will be less affected by the recession than its neighbours and will emerge sooner from the crisis'. What an idiot. Over 60% of French exports are directed towards Europe.
EU economies are closely interwoven, so they will start recovering together if ever again.
QUOTE (monsta666)
Britain and the US are following similar strategies in tackling the recession. Both countries are providing various stimulus to kick start the economy. To some critics they will say: "they are borrowing their way out of trouble." The main defence both countries will make for their policies is that they want to avoid the mistakes of Japan in early 90's. When Japan experienced a recession in the late 80's they were overcautious when it came to tackling the economy. They did not provide many stimulus packages, as a result, it experienced a period of low economic growth for much of the decade. BritaiECBn and America want to avoid this scenario and do not want the recession to drag out for many years.
Both the US and the UK have take the option to print money. It's a powerful lever to kickstart the economy, but they ought to be more carefull about how they use and abuse it. Because if the world suddenly decides that the printed dollars and pounds aren't worth pigeon s**t against - say food or energy, then the prices in US and UK will skyrocket.
The Eurozone countries have abdicated their right to emit money. Only the ECB is allowed to issue Euros. To be precise it can lower its interest rates, at which point the Eurozone private banks and states become more interested in borrowing money from the ECB in order to invest them.
Usually it's the private banks who ask for money to be printed, so they they can invest in businesses. But since the crisis started they are afraid to invest, because their investments might get "swallowed up" by some troubled assets hidden somewhere. (You will ask "what ?? how can this be ?")
So the states have taken over and started borrowing money themselves, money that they've distributed as stimuli. But those stimuli were indeed swallowed up by some troubled assets hidden somewhere.
And now everyone's in dismay, while job insecurity is spreading. To my mind, nationalizing all the banks immediately was - and still is - the smartest move for many countries. For those who can afford it at least ... Eastern Europe is 'owned' by western banks for instance.
Anyway, the situation is very bad. Some experts are predicting 'geopolitical dislocation' for the end of 2009 ! LEAP Europe 2020
Nah, you're far from the truth. There have been no huge banks collapsing, merging or being nationalized anytime since the 30ies. Large companies have not gone bankrupt overnight, unemployment has not risen so sharply for as long as anyone can remember. Tax fraud and tax havens have never been adressed with so much political determination.
Everyone in the West is strapped for money and investments !
Every serious econmist warns about a crisis of unprecedented severity. And the political world has taken the measure of the problem, otherwise they wouldn't pour stimulus after bailout after rescue money into the economy.
IMHO, today's crisis is to that of the early 90s what generalized cancer is to a summer cold.
QUOTE (monsta666)Saying all that it is not all doom and gloom. Some forecasts state the rate of decline is decreasing. In other words, people expect the economy to decrease by a lower rate in the next quarter (say 1% as opposed to 1.5%). Now I know that predicting the economy is notoriously difficult but I think the economy (the British economy at least) will reach it's lowest point sometime in October 2009.
Well, I sure hope you're right, because I'm currently unemployed and eager to work.
But some people say that the situation is even worse in Europe than in the US; it's only presented differently.
Besides, they say that the stimulus plans in Europe are meager compared to the Obama initiative: 5% of GDP in the US to be compared with 1.3% in UK, 0.8% in France and only 0.4% in Germany.
Also - don't hope that UK will start growing while the Eurozone is still in decline.
EU economies are closely interwoven, so they will start recovering together if ever again.
QUOTE (monsta666)
Britain and the US are following similar strategies in tackling the recession. Both countries are providing various stimulus to kick start the economy. To some critics they will say: "they are borrowing their way out of trouble." The main defence both countries will make for their policies is that they want to avoid the mistakes of Japan in early 90's. When Japan experienced a recession in the late 80's they were overcautious when it came to tackling the economy. They did not provide many stimulus packages, as a result, it experienced a period of low economic growth for much of the decade. BritaiECBn and America want to avoid this scenario and do not want the recession to drag out for many years.
Both the US and the UK have take the option to print money. It's a powerful lever to kickstart the economy, but they ought to be more carefull about how they use and abuse it. Because if the world suddenly decides that the printed dollars and pounds aren't worth pigeon s**t against - say food or energy, then the prices in US and UK will skyrocket.
The Eurozone countries have abdicated their right to emit money. Only the ECB is allowed to issue Euros. To be precise it can lower its interest rates, at which point the Eurozone private banks and states become more interested in borrowing money from the ECB in order to invest them.
Usually it's the private banks who ask for money to be printed, so they they can invest in businesses. But since the crisis started they are afraid to invest, because their investments might get "swallowed up" by some troubled assets hidden somewhere. (You will ask "what ?? how can this be ?")
So the states have taken over and started borrowing money themselves, money that they've distributed as stimuli. But those stimuli were indeed swallowed up by some troubled assets hidden somewhere.
Anyway, the situation is very bad. Some experts are predicting 'geopolitical dislocation' for the end of 2009 ! LEAP Europe 2020