Are We Seeing A Repeat Of 1929?
Partially because of the rapid growth in telecommunications and Information Technology we have seen growth parameters including the GDP rising continuously during the 1990's any beyond. While economic indicators are naturally cyclical, the recent sharp declines on the global scale have far exceeded the expectations of economic experts analysts. In Asia as well as Europe and the USA these declines have been the steepest since 1929.
The criticality of the current world financial situation has indicated a strong need to strengthen and perhaps reinvent our existing economic and financial models and practices. The financial rescue, or bailout if you prefer, packages put in place just recently initially did little to stop the plunge in stock indexes. Admittedly it will take some time to tell if these financial aids will have the desired effect of turning the USA and global economies around.
For instance the experts comments over the fall of one of the largest banks in US the Lehman Brothers is said to be a calculated and well predicted with time. The policies, strategy, pay role to the employees, exposure to in-calculated field, mortgages over last decade clearly indicates a poor management and policies adopted by the company. If these were so much visible to the experts then why action were not take with time? similar kind of stories lies beneath the fall of other biggies too. These have made many investors, employees and IT companies to shut down the shop or making them bankrupt.
The question arises here is how long and how many times a country or banks would be able to prevent these debacle? Is our strategy of investment or portfolio being adopted is healthy enough to promise a sustainable growth rate. Surprisingly the recent G7 meeting couldn't find out feasible solutions.
The US and China have been working together to attempt to get tings turned around with perhaps some success. However, even if these to major economic powers experience some success in achieving a recovery, the other Asian and the European countries have to be fully involved in the process.
The practice of instituting financial rescue or bailout packages begs the question as to how long and at what cost will financial institutions and economies be able to withstand the pressure leading to future debacles. While the financial situation is under repair the investor has to review is or her own patterns of investment to determine how, from this time forward, to gain a sustainable growth rate.
The small investor having been burned by the recent slide will no doubt be very cautious as to when and where to invest any additional money. And well he should be until the political leaders of the countries most involved get together and put in place practices designed not only to reverse the current situation to prevent it from happening again.
We may feel sometimes that a plunge in the stock market affects only the major stockholders, the "big boys". It is not always apparent that a decline in the stock market means that companies issuing stock suddenly find themselves with insufficient capital to meet their goals. The results can mean decreased production, lower wages, and lost jobs. Eventually these negatives can and will affect the average citizen. As a part of any recovery package the average citizen needs to be educated as to what the big picture means to him or her.
The criticality of the current world financial situation has indicated a strong need to strengthen and perhaps reinvent our existing economic and financial models and practices. The financial rescue, or bailout if you prefer, packages put in place just recently initially did little to stop the plunge in stock indexes. Admittedly it will take some time to tell if these financial aids will have the desired effect of turning the USA and global economies around.
For instance the experts comments over the fall of one of the largest banks in US the Lehman Brothers is said to be a calculated and well predicted with time. The policies, strategy, pay role to the employees, exposure to in-calculated field, mortgages over last decade clearly indicates a poor management and policies adopted by the company. If these were so much visible to the experts then why action were not take with time? similar kind of stories lies beneath the fall of other biggies too. These have made many investors, employees and IT companies to shut down the shop or making them bankrupt.
The question arises here is how long and how many times a country or banks would be able to prevent these debacle? Is our strategy of investment or portfolio being adopted is healthy enough to promise a sustainable growth rate. Surprisingly the recent G7 meeting couldn't find out feasible solutions.
The US and China have been working together to attempt to get tings turned around with perhaps some success. However, even if these to major economic powers experience some success in achieving a recovery, the other Asian and the European countries have to be fully involved in the process.
The practice of instituting financial rescue or bailout packages begs the question as to how long and at what cost will financial institutions and economies be able to withstand the pressure leading to future debacles. While the financial situation is under repair the investor has to review is or her own patterns of investment to determine how, from this time forward, to gain a sustainable growth rate.
The small investor having been burned by the recent slide will no doubt be very cautious as to when and where to invest any additional money. And well he should be until the political leaders of the countries most involved get together and put in place practices designed not only to reverse the current situation to prevent it from happening again.
We may feel sometimes that a plunge in the stock market affects only the major stockholders, the "big boys". It is not always apparent that a decline in the stock market means that companies issuing stock suddenly find themselves with insufficient capital to meet their goals. The results can mean decreased production, lower wages, and lost jobs. Eventually these negatives can and will affect the average citizen. As a part of any recovery package the average citizen needs to be educated as to what the big picture means to him or her.
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