Friday, September 16, 2011

US economy is skating on thin ice ----by Shan Saeed

The U.S. economy is skating on thin ice although President Barak Obama's $447 billion jobs plan could steer the country away from murkier waters. It could not stimulate the economy. . I see lot of bloodbath in the global financial markets for the next 2-years.

US economy is now in a recessionary territory and its vulnerable to being blown off course. I am forecasting the economy to grow 1.8 percent in 2012 and 2.3 percent in 2013, although approval of Obama's jobs program could improve those predictions. But, I doubt. I would like to see the president’s proposal enacted because if it were passed, the economy could grow 2.6 percent next year instead of 1.8 percent. Economist disagree with job projections of Obama's team.

Debt woes in Europe and their potential threats to global financial systems serve as the main perils to U.S. economic stability. Should Greece default and spark a global banking crisis, the economy could be due for more shockwaves than the one stemming from the 2008 Lehman Brothers collapse on 15th Sept-2008. It's what happens to the other periphery economies" if Greece defaults. European authorities may find it tougher to help larger economies like Italy, should the need arise. European leaders lack political will and global brinkmanship

Stock markets have embarked on wild swings due to fears that any defaults in Europe will lead to banking problems there and in the U.S., and officials across the Atlantic say Europe depends on the survival of the euro. Europe is in danger and Poland holds the presidency. If the euro zone breaks up, the European Union will not be able to survive, with all the consequences that one can imagine.

Disclaimer: This is just a research piece and not an investment advice. All financial transactions carry a RISK.

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