Incase you haven't heard (and who hasn't), the two topics everyone is talking about are the financial crisis and the US election.
Today (being stuck in the most boring lecture ever) I would like to sum up the economical situation as I understand it to be.. In words we can all get xD
Market inflation, high prices of oil, and pushing consumerism to its breaking point lead to alotta people getting bank loans ( to get stuff they can't really pay for) aka: empty loans. Banks then used those empty loans in the stock market.. Which -inevitably- lead to a stock market crash.. Banks closed down, people went out of business.. Major corporations suffered from the crunch (tried to accommodate by mergers.. Eg. General Motors).
With people not having enough money to go out and spend money.. Oil prices started to fall.. However, this can add more strain on the financial situation as lower demands worsen the economy.
The government stepped in with a bailout plan to pump money back into the economy. Weather or not banks will use this for more loans is questionable.
Since the states compose 21% of the world economy, their financial crash has affected a lot of countries. Stocks fell worldwide, prices soared, and economists predict the worst financial crisis in the last 80 years to be around the corner.
So there you have it! What has to be done and what the future holds is still not clear (what with the elections, financial plans, government involvements.. Etc). But whatever happens is going to affect all of us, oil rich countries included.
- to 1600, and a fleeting week! xx
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