Americans are losing confidence in a poor economy bouncing back, yet are we in for a double-dipped recession? Double-dipped would mean a small growth after a recession, followed by another recession. While many economists argue over what the future will bring, Americans are finding the outlook grim at best. Billions of dollars are being pulled out of investments just in the first half of 2010 from small investors as they lose their stomach for risk. Europe’s debt crises is impacting stocks globally causing investors to not trust the falling prices furthering the downward cycle of American economy. Friday, the main European currency of the Euro, fell to its lowest level it has seen in a 8 month period. While chances are slim, Greece is in so much financial trouble, they could default which the impact of this would be felt worldwide as 70% of Greek Bonds are held by foreigners.
American Consumers have curbed their spending, economist assert that this is keeping the growth rate of economy low. Yet more and more Americans are forced into not spending when they have lost their jobs, their homes and their vehicles. More and More factories and manufacturing in the United States are shutting down as they outsource to other countries where labor and production are cheaper. Many areas in the United States have seen no improvement whatsoever where unemployment remains at an all time high. We have gone to a primarily service work nation where wages remain low and not much hope for improvement without a strong industrial base. The job market is in dire trouble and the one thing economists do not argue is that our country is in bad shape.
On the same token, Wal-marts has been quietly hiking up their prices over the last 2 months, ignoring the feeling Americans are spending less. The price increases have been putting them out of the running as a discount store, and now many may find prices at small local stores far cheaper than Wal-mart prices. Many are also turning to less spending at the stores by growing gardens again to combat the rising prices of food as they struggle to provide food for their families.
The Hindenburg Omen, a device developed by a blind mathematician Jim Miekka, to predict a stock market crash has Wall Street buzzing in alarm. Last week the lights flashed red, predicting a stock market crash for September of this year. The Hindenburg Omen can predict with up to 25% accuracy, enough cause for alarm. A stock market crash, if predictions become reality, will further spin the economy into grim lows. Can America survive the doom and gloom? At what point will it be considered an all out Depression rather than recessions or double dipped recessions?
With the fall of manufacturing, unemployment hit nation wide highs and is not expected to fall to the average lows of 5% until the year 2015. Growth rate for the economy is only expected to rise at a level of 3% making for a very slow and painful economical growth. Poverty rates are up as well as the homeless and jobless in America, yet this is a problem being seen world wide now and not only our problem. Greece is in critical economic condition, but perhaps their stronger neighbors of France and Germany will aide them so they do not default.
While the outcome is looking fairly grim, there are a few that remain optimistic despite all the doom and gloom of others. There is no doubt we have been in need of change for a long time and perhaps the situation we face will take us in new and better directions. As long as our country operates on a deficit and outsources our manufacturing, we will remain weak. This may just be the catalytic event in our history that forces us to take a good look at how our country has been managed and operated. We need a change and that is one thing at the moment that can not be argued.