World markets fell over US debt deadlock fears – Predicting the future in 2012

It was during summer 2011, nearly 4 years since the economic downturn began that the US economies and the countries of Europe continued to struggle as the markets were roiled by the fears of new setbacks, defaults and other possibilities of yet another double-dip recession. Behind this turmoil in the US and the other economic powers like Europe lay many economic factors among which the most important is the stubbornly high unemployment rate in the US, the partisan fight in Washington over the raising of the federal debt ceiling and the sovereign debt crisis in Europe. The harsh decision of chopping off a notch from the pristine credit rating (AAA) and its aftermath was also an influencing factor behind this gross financial crisis. The US government is not only drowning in a sea of debt but the consumers are also rushing to the professional debt settlement firms in order to lower their personal debt ceiling and stay on the right financial track.

Apart from all the aforementioned signs, the clearest trigger was when the Commerce Department released the report that said that the gross domestic product grew at an annual rate of 1.5% in the second quarter of 2011 and this was way below the prediction of the analysts. The Commerce Department also revised the annual rate of the 1st Quarter to 0.5% from the earlier estimates of 1.8%. While the debt debacle paralyzed the entire America, this entire phenomenon even caused jitters in all the power corridors from Brussels to Beijing and the stewards of the world’s largest economies are very much anxious for a compromise to keep the finances from collateral damage.

China was probably the hardest hit when the US was going through this tough economic phase as it held the largest amount of Treasuries of at least $1.17 trillion and they even called a blistering attack on Washington as this showed height of irresponsibility. While this donkey and elephant fight between the Americans continued, the worst part of this saga was that this affected the well-being of many other countries. The officials in Europe were very diplomatic as they archly called the American leaders who admonished them about the messy politics of the continent’s debt crisis.

If the American leaders want to see a better future in 2012, they have to leave behind the threats of credit downgrades and the implosion of the Euro zone. The markets are gradually showing marked signs of improvement with the expected jobless figures and the Labor Department said that the weekly unemployment benefit applications have dropped for the 4th time in the last few weeks. Therefore, with such improvements within the US economy, we can certainly forget the fears of the economy backsliding into yet another recession.

Apart from the economies, the business organizations are also bracing a tough ride as the economy is going through the unexpected turmoil through the last few months. However, though the US government is taking all the steps in order to get back on the right financial track, the world economies are still skeptical about the future of the economy but still have not lost their hope on the actual economic superpower.

This article is a guest post by Rick Murphy, a contributory writer associated with He holds his expertise in the Debt industry and has made significant contributions through his various articles.

About the Author Empress Of Drac

Empress often finds herself either lost inside her mind or lost in beautiful scenic places. She's currently doing the things she loves while maintaining a frugal lifestyle. This blog is all about her struggles to live a frugal life, her quest to see the world via budget traveling, and her love to share to people everything that she is passionate about.

Agnes does not absolutely conform to any beliefs or philosophies. Though she's writing about frugal living and is currently embracing the minimalist lifestyle, she doesn't want to define her existence based on these realities alone. For her, life is too diverse, too colorful, too mysterious, it would be a waste of experience (and time) to imprison herself to a few sets of ideas. Google+ | Twitter

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4 Responses to World markets fell over US debt deadlock fears – Predicting the future in 2012

  1. escargot says:

    It has become quite the issue, but I don’t see an easy answer to the problems either.

  2. I believe the US can get through the crisis. They are called the super-power nation because they have all the resources to surmise to the top.

  3. escargot says:

    you have a good point Gold.

  4. Naija Jobs says:

    Every crisis always has a solution, if and only if thought are given the the cause and solution. Credit downgrades is just an opinion poll. The US is more than capable of giving thought the source of crisis. You points are really worthy of note. Thanks

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