After the subprime crisis is almost certain that the Americans will be confronted with another: the crisis of unpaid debts on credit cards, which seems to have reached a thousand billion dollars! And it is very likely to find that the scenario is repeated in the case of subprime: American debt credit cards were “sliced” and slices sold various banks and investment funds closed, in search of higher profits in the short term.
Undoubtedly, in any economy, consumption, private and public, is an extremely powerful engine of economic growth. And here they are, in my opinion, the explanation that the stock markets fall dramatically after few days of relative growth: investors fear that would follow a serious credit crisis, which lead to a sharp reduction in consumption.
The fact that banks were recapitalize with public money does not mean that people will be quick and easy access to loans. In addition, a campaign to stimulate consumption in disagreement with analysts warning that require people just reversed, not only to really confused here and worse things. The best proof that such things work is the revival of consumption, in summer, the U.S., where the U.S. has provided some broad categories of citizens a tax credit, a check whose value went from 600 to 1,200 dollars . Now, when shooting line, to see that action, which cost 100 billion dollars, has been a failure, over 80% of this amount being saved, not spent.
It is very likely that the repetition of this scenario is what leads to other results, although McCain thinks to use it. Paradoxically, now the question: how boost consumption, not to alter the real economy?
To analyze the two types of consumption: public and private. Public consumption is affected by the crisis, while, with few exceptions, the budgets of all developed countries are deficitare.Consumption private is dependent on private income, which developed in the West have fallen significantly over the past 20-30 years. Their purchasing power has been maintained by recourse to credite. If Europeans increasing deficit is practically banned in order to boost economic growth by financing new projects for public investment in infrastructure, then how can act, because no public-private partnerships have no way to find sources of financing on terms acceptable?
Much of the money funds sovereign China on the one hand, and countries exporting oil from the Persian Gulf and Russia. Only those countries that have problems: China’s trade surplus will decrease, inevitably, with the decrease in demand in the U.S. and European markets, in particular, and receipts from oil will be a ceiling. It is very likely that prices will stabilize somewhere in the range of 60-90 U.S. dollars barrel, light and economic situation.
Will invest those countries with large surpluses in the balance of American and Western economies, and if so, under what conditions? For this money depends, ultimately, relaunch consumption, in the broad sense.
I do not think Sarkozy will get the mondial government to that required, but one thing is sure: we have a global crisis and must managed only with the help of all the major players involved.
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