The world economy in trouble – Chanell Smit

The world economy seems to be heading at a downfall. The rapid decrease in the growth of the world economy is due to the sovereign debt crises in countries with the Euro currency. This debt crisis has already affected a number of European countries, and it keeps getting worse and accelerates the weakening in the balance sheets of banks who is sitting on related assets. Even though governments of these affected countries took serious steps to reach a solution for Greece, financial market turbulence just kept on worsening and concerns increased of debt default in some of the larger economies in the euro zone, especially Italy. The economy of the United States faces persistent high unemployment, bad business confidence, and high fragility in financial sectors also because of their high debt.The problems of the EU and US could easily flow to one another and cause another global recession. Developing countries would be hit through trade and financial channels. The financial disorder following the political disputing in the United States in August 2011 about the debt ceiling and the deepening of the euro zone debt crisis caused a spreadable sell-of in equity markets in many developing countries, causing rapid withdrawals of capital and pressure on their currencies.Its said that the US in co-operation with china can solve the instability because these two economies holds the key to global economic stability. China is also experiencing a decrease in economic growth: China might prevent any further decrease in growth by focussing on appreciating their currency and shift from their reliance on exports to an economy based on consumption. Spain is also following the same path as greece. The world economy seems to be heading at a downfall. The rapid decrease in the growth of the world economy is due to the sovereign debt crises in countries with the Euro currency. This debt crisis has already affected a number of European countries, and it keeps getting worse and accelerates the weakening in the balance sheets of banks who is sitting on related assets. Even though governments of these affected countries took serious steps to reach a solution for Greece, financial market turbulence just kept on worsening and concerns increased of debt default in some of the larger economies in the euro zone, especially Italy. The economy of the United States faces persistent high unemployment, bad business confidence, and high fragility in financial sectors. The European Union and the United States of America are deeply in trouble. Their problems could easily flow to one another and cause another global recession. Developing countries would be hit through trade and financial channels. The financial disorder following the political disputing in the United States in August 2011 about the debt ceiling and the deepening of the euro zone debt crisis caused a spreadable sell-of in equity markets in many developing countries, causing rapid withdrawals of capital and pressure on their currencies.There is reason to be concerned about the global economy!  http://www.infowars.com/the-collapsing-us-economy-and-the-end-of-the-world

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3 comments

  1. Here’s the first student post on the blog. Thanks nclecon621. There are a couple of things that you can sort out with an update, but we’ll talk about the details in class tomorrow.

  2. Guys I am starting to work through the first round of blogs on topic 2. I think that you did a good job describing the things that are now happening in the world economy, but it will be good to add more evidence – numbers on slowdown of growth, or spread of bond yields. Saying that, you did miss the topic a bit. Your assignment was to write about what the things that are happening now mean for for the future of growth and development. Finally, for future posts, you can clean up the editing, check for typos, structure the text in paragraphs etc. There is a weird bit of repetition from about the middle of the post – I’m not sure if that is padding or a technical error.

    1. Thank you for the feedback sir. We will definitely improve as we work through mistakes. The repitition must have been a technical error. You will see better blogs from us in the future!

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