The U.S economy is in a state of utter pessimism. While a few people may disagree with this view, a majority are digesting this fact. Otherwise, the job growth would not have been so poor. The progression in profits of corporations would have been decent. The trillions of dollars that the Federal Reserve has put into its economy have not been enough to revive the economy. Is this an indication of the financial collapse of the U.S?
In the housing sector, there are a huge number of resale homes that have been foreclosed. After the year 1963, the year 2012 has recorded the lowest ever figures of sales of new homes.
Under-employment in the U.S. remains a cause for problems ahead. The present figure of the same is 15%. It has remained so since quite some time now. The debt crisis in Europe has cost the American banks about $1 trillion. The banking figures resultantly are not satisfactory. All these may be factors contributing to the aforementioned financial collapse.
Currently, the U.S. government owns / and or guarantees about fifty percent of the residential mortgages in the country; thanks to it finding fault with the former owners / guarantors Fannie Mae and Freddie Mac . Presently, the number of U.S. home mortgages that are in the foreclosure process or that cannot pay their over-dues is approximately five million. To add to these losses of the U.S. government, politicians have appended trillions of dollars; hoping that the economic situation will gradually ease. It is estimated that the national debt will be about $100 trillion; almost 150% of the gross domestic profit this year.
With a downgraded credit rating, forty four million people are utilizing the food stamps program to buy food at subsidized rates. Internet jobs are not very promising. The U.S cannot boast to have a globally leading manufacturing industry; the positions have already been clinched by Mexico, India and China.
The stock market is showing great volatility. There is an increase in the price of commodities and also in precious metals like gold, with the devaluation in the U.S. dollar. The rates of interest have been reduced to almost zero figures. Inflation has indeed badly affected the Americans. With such a dismal background, how can the U.S. government cruise through the next recession?
Historically, a few months hence, with the ensuing bear market phase, the stock prices will go below their March 2009 lows. The government may be forced to increase interest rates to combat inflation. This will be disastrous for the U.S. housing sector. It will be a virtual caving- in of the economic situation. Does all this not hint at the U.S economy heading towards the path of an unavoidable financial collapse?
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