Oct 25 2008
The Recession That’s Just Around The Corner.
Well, here it is! - They said it was going to happen; and now it’s just around the corner. Since the credit crunch hit hard and almost brought down the banking system just a few short weeks ago, the threat of recession has lay in wait. We are now on the verge of possibly the largest financial crisis in the history of the world. UK Prime Minister, Gordon Brown admitted on Wednesday that we are now facing a global recession.
What was so frightening and so hard to take in, was that the impending banking collapse had implications worldwide. It first started in the USA housing market when banks lent money for mortgages to people who could quite simply not afford them. These sub-prime customers had difficulty meeting their repayments, and the crunch began. In a very short time, this had quickly escalated and extended its branches out to reach most corners of the world. The sheer scale of the financial collapse was hard to take in and quite unbelievable for something of this enormity to occur within the financial institution in this day and age. That it should have been allowed to get to this ominous stage in the first place at all, defies all sensibility.
So all we can do for now is to tighten the purse strings and keep our fingers crossed. This recession promises to be a very nasty one and small businesses have a real job on their hands to stay afloat, given today’s financials climate. By the end of this year unemployment will reach the two million mark, with a forecast of three million by the year 2010. There is a real fear that all the millions of pounds of taxpayers money used to bail us out of the credit crunch, will just be soaked up to no avail, whilst the financial situation continues to worsen all round.
Families all over Great Britain are suffering, with higher mortgage repayments than they expected to pay, electricity and gas prices soaring, and food prices increasing also. With the markets plummeting, the currency losing it’s value and the loss of faith in the government, all we can do to help ourselves is to watch our expenditure and hope that we are not one of the unlucky ones to be made redundant. Negative equity is on the horizon and many houses will be repossessed because the owners will no longer be able to afford to pay their inflated mortgages.
This downturn is expected to last until the end of next year, and the impending recession is forecast to be far worse than the recession of the early 90’s. I remember that well, I had a shop at the time which I had worked very hard to turn it into a successful business, and overnight suddenly nobody was spending any more. It was immediate and it was very baffling and within three months I was forced to close.
Recessions are nasty things. People stop spending, which in turn loses people their jobs, which in turn causes people to lose their faith. Only time will tell just how serious this global recession will actually be, and only then can we learn how to deal with it.-
Christianna Garrett-Martin
we need to buck the fed, they’re a big reason that we got into this mess.
I hate to think of the damage this recession could cause. Expected to last until the end of 2009 too! The predicted job loss is terrible and it sounds as though it’s really going to hit hard. Hopefully it won’t be as huge an issue as is expected, I’m not too sure though, and as you say; we shan’t know how best to tackle it until we know how serious it truly is. An incredibly well written article on a very current issue; I very much look forward to reading further posts from you here in the future.