What made 2011 a mercurial year and what should be done to avoid such situation in the future? – Part 1

The US and the European economy stood on Achilles’ heel the whole year, meaning 2011. Although the 2008 financial crisis settled down after inflicting so much damage to the whole world, its aftermaths are still taking their toll on the employment rate and
the debts and borrowing systems in both continents.

The US economy is still trying to win the confidence of the US public, especially the investors and the turmoil is now aggravated by the European Sovereign Debt situation. There are two reasons, why the US companies are unable to come out of the abyss of
the financial catastrophe.

First, there is still no happy ending to the crisis that devoured the whole globe in 2008. Risks are still looming on the head of the financial mammoth and there is no way in sight to avoid the potential crisis with the like of current European situation.

Secondly, the governments, especially the US authorities, are unable to find a long-term solution for the betterment of the current situation. The year 2011 was even more mercurial than 2009 when US president Barack Obama carried on with his predecessor,
George W. Bush’s solution of $700 Billion as financial easing (quantitative easing) for the corporate sector to keep the unemployment rate at 9 percent. Surely, that particular step ended in ruins as the very rate skyrocketed to a whopping 25 percent last
year.

With no ending to the aftermaths on the horizon and dearth of long-term solutions, the corporate sector has ended once again with questionable eyes prominent on the faces of investors. The European crisis did not help the aforesaid either as the US had a
major role in dealing with the continental economy during the 2008 ordeal.

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Posted by Usman Khalid on Jan 3 2012. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry