Saturday, October 1, 2011

The Great Depression: 1930 or 2011

This topic has been hot lately. What really controls the economy? Forget interest rates, forget deficits, forget the Fed, forget Iraq, and forget which party is in Power. In fact, just forget everything that permeates the news. As the banking sector is in crisis because banks are not have safe enough debt to equity ratios, resulting in a severe credit crunch. The effect of the current portion of the economic crisis has produced two incredible events: the Federal Republic's deficit will exceed 1200 billion and the Fed increased its balance sheet by about the same amount.

For those who are uncertain what the recession is real, I will do my best to find quickly. The recession is a downturn in the economic cycle. The pillars of the recession of 2011 are founded along the three major elements of the administration. The second phase of the recession in 2011 is the retail sector. Governments have gone through the clauses, which mean that they can manage their units in any way they want. The worst recession in U.S. history is by far the most aptly named The Great Depression. Although the stock market returns to some of its losses at the end of 1930, profit was not enough to combat the economic depression.

During a great depression, many companies suffer from a sharp decline in sales of their product or services For this reason, often many companies downsized in large numbers. In the depths of the Great Depression in the 1930s U.S. unemployment reached 25%. With a depression that is economically about seven times deeper than the 1930 where will unemployment reach this time? There are other serious problems. The national debt is very high, high deficits of trade and budget, the huge unfunded liability, and the high leverage of too many companies and individuals. U.S. policy in Europe - as more and more companies and businesses in the United States begins to fall, the U.S. began to take a high tax on imports and to protect American businesses and corporations. One of the most important causes of economic recession is reduced demand for goods and services. It is not difficult to understand that we produce more than we consume.

I suspect that Mr. Bernanke is preparing the market for the possibility that there may not be enough buyers of government debt. If it happens that the Fed will have to step in and be the buyer of last resort. The economic depression of 2011 will focus on public resources such as health and business. Sound counter-reform provisions may be the best way to avoid this.

1 comment:

  1. Death and DestructionOctober 3, 2011 at 11:11 AM

    The "American Empire" is collapsing. In the U.S., basic staple goods like quality food and water are too expensive for most people to afford and "food riots" will happen across the country. Major American cities are starting to look like disaster zones, and mass homelessness exists across the country. Crime is rampant, with much of it being directed at the rich. Kidnappings and ransoming's of rich people are on the rise. Average people fed up with big government, high taxes and out-of-control spending join tax revolts.
    The world is also experiencing major environmental problems and "the blackest of plagues." The global financial system has also "melted down" and the situation is very bad outside the U.S.


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