America in freefall …
OH GOD! PULL YOUR MONEY OUT OF THE BANKS & STUFF IT IN YOUR MATTRESSES!!!
J/k … Seriously, don’t do that. It’d screw the whole world very quickly
According to two argumentative economists on TV … one for, one against the government bailout of US banks, which has been temporarily (and probably permanently) canned anyway, the USA produces approx 25% of the worlds goods, but consumes approx 60% of the worlds goods.
Since the money in the USA has run out, what are the effects on the rest of the world?
The way I see it is that there will be a temporary world recession, lets say 12 months, as the majority of production will come to a virtual standstill as the majority of producers aren’t going to know where to send their products and they’ll be stockpiling for a few months before scaling back production … until they find new customers/endpoints for the goods they’ve stockpiled, and of course to send their future production capacity.
The USA will find their influence in the world economy virtually stripped, as their consumption drops back to significantly less than they are producing - this will be a huge drop in the Quality Of Life that the people in the USA enjoy atm (Sorry Guys) - admittedly, much of this is wasted rather than used, so probably not too much difference in QOL.
But keeping in mind that the Worldwide resources, transport systems, production facilities and human resources are already in place (and hopefully paid for in advance, rather than by US financed credit ), it’s just a matter of finding new markets, or more likely (and initially), expanding existing markets.
These markets will likely be China, India, Africa(?) & East Europe, but also likely the QOL of other non-USA parts of Western Society will also see a significant (but temporary) influx of wealth (or at least a huge excess of products, which makes everything cheaper), freed up by the US recession. Basically, the recession in the USA will cause some temporary setbacks, but will provide then provide a huge boom to the rest of the world … which will eventually stabilise, and then the worlds economies will slowly start to climb as they usually do.
Since the whole world economy is circling the drain, maybe it’s a good time to implement sustainable environmental accounting, eh?
If it’s implemented, it may impede the economy initially, but then how would we really know?
So anyway, I guess, the question is:
How do you think the US recession will affect you and your country, over the next 12 months, and over the next 60months (5 years), and the long term?