Up To When Will The Recession Last?
“No doubt this recession is really a hard nut to crack, but a faint ray of light is visible at the end of the road and we need to focus our attention on that only. A severe intervening period of at least a couple of years should not deter us from making efforts for the common good. ”
We are in the midst of a worldwide recession and about 15 months have passed since it first struck us. The growth rate has touched zero in many countries. The rate of unemployment has reached close to a whopping 10% in many developed and developing countries of the world. GDP is close to zero value in some countries and the total GDP of the world may be even below zero in the time to come.Some people predicted earlier that the recession would end in the last quarter of 2009. Now, predictions are pouring in from all over the world that this recession may well continue for many years to come. Lack of radical steps on our part may cause it to linger on even further.
While inflation is easier to tackle, the deflationary process to which our world is subjected to is really a very worrisome matter. People are so much wary of the market that they have almost taken it for granted that the prices are sure to fall in the time to come. Who would show the courage to buy in such a scenario?
We have to put our housing market in the right order if we want to steer clear of this menace. Ideally every possible mortgage contract should be quashed. We some how prevented the total meltdown but still the economy is in a very fragile state.
A majority of the financial institutins has gone totally bankrupt or is on the verge of insolvency. So, more and more banks should be nationalized. Even if the statutes of a particular country don’t permit the legal nationalization of these financial institutions, amendments should be made and the process put in working. The government owes the responsibility of putting the banks in the right order by adopting them.
The total amount of financial loss has not been totally borne by the banks alone. Rather, various other units like the hedge funds and pension funds also have borne the brunt. The government should lower the interest rates as far as is viable and make huge efforts regarding the purchase of those assets that have become very toxic. The stimulus packages need to keep pouring in.
No doubt this recession is really a hard nut to crack, but a faint ray of light is visible at the end of the road and we need to focus our attention on that only. A severe intervening period of at least a couple of years that has been widely predicted should not deter us from making efforts for the common good.
Author - DeeKay
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