The current US financial downfall has made people argue that it has been the severe recession in the last fifty years. United States has not been in such a condition since World War II. Ineffective strategies and inappropriate monitoring of the banking system over last few years has led to this situation. The reasons for the downfall are still unknown. But many strategies have been suggested to
overcome this crisis. But its impacts are evident in the European economies as well. It is also known as the recession of 2010. The stock exchange as well as bank sector is going through a decline. Investment has been reduced due to the unavailability of loans from the banks. On the other hand, banks fear the recovery of loans and hence are reducing the credit every month. The recession 2010 has been resembled by the experts with the Japanese recession of 1990’s when the real estate values of Japan fell drastically.
Many banks became insolvent as well as the stock exchange faced bearish trends. How it turn out to be probable! It is a widely asked question about the Japanese recession as it has an industry which is well reputed and is considered as a developed country. The banks of Japan faced lack of credit to offer to the borrowers in the recession. The similar is the case now with United States of America the United States can follow the strategy adopted by Japan to over come that situation. Still Japan has net recovered the losses and is going with a slow economic growth. But its economy is now showing positive and growing trends. The United States condition in this recession also resembles the case of great depression of 1930s. There are many similarities of this present recession and great depression of 1930s. Few of them which are considered by people as the depression signs are discussed here. First of all, the macro economic indicators of the economy are showing the same trends as the ones in prior recessions. The GDP growth rate is reducing. Investment and credit rate is falling which is affecting social life as well. The unemployment is increasing due to reduced investment and money supply. Moreover, the country is going through a recession which also indicates a depression if not controlled by fiscal and monetary strategies. Capital and labor must be facilitated in order to get out of recession.