My solution to RECESSION

Again this post is all about economics. True economic interested people try to go till the bottom of this post. Here I come with a solution for the current economic problem. I first assume that all reading this post know the current economic condition. For the one who does not know, here it is

Now the world economy is facing a problem called RECESSION. What is this RECESSION? Might be your next question, I will say you. No economy in this world is static, means every economy is growing. Of course growth rate differs from economy to economy, to make very simply, growth rate differs from country to country according to their policy and political moves.

We must also know one thing that is; no country in the world is self sufficient. We always depend on others for some reasons are for other. Reasons may be anything, food, clothing, defense, etc. but we depend.

Now I suppose you learnt what recession is. Recession may occur to own country, are to all the countries in the world, are to major economic players. If one single nation faces this recession, major economies can join together to bring the nation out, are the nation by itself by formulating its own economic policies can come out of recession.

What will happen if all the countries in this world get affected because of this economic shut down, in other words known as recession? This is the real situation in this world now. No economy is growing at a required rate.
The growth rate is negative are in decimal points. Really problematic. You may ask what if all the nations grow slowly? What if a child who is 10 yrs old has the brain of 1 yr old kid? Problems right? That is what will happen if the countries grow slow.

Here I have a solution to this recession. This recession is because there is no money in the hands of business men and people who want to invest money in some assets. Then where is all the money? It’s with banks and other financial institutions.

I would suggest banks to lend money to promising business men at a low rate of interest, so that, they will eagerly get money, develop their business, give employment and circulate money in the hands of needed.
As the interest rates are low, the business people will show more interest in expansion of business and with that expansion and all upgrading stuff, they will earn profits, out of which they will be bound to pay the interest and amount borrowed.

Simple is it not? Yeah it is. Now what we need to do is circulate money, spend. With an simple example, if A is a person who is earning 1000$ and if he had been saving 100$ all these days, he must start saving 50$ and start spending all the amount.
in other words cut down your saving to half, spend all the money circulate money, make money available in the hands of all, and problem is solved. You may question me, what if the business men are not able to make profit? There are chances for heavy loss. However , a promising business man who has really good projects with him wont fail. How to find if he is capable business man? Very simple, all these days banks where giving loans, just after getting and having a over view on the projects submitted by business persons. From now on start scrutinizing the projects with almost care and give loans.

Thus my solution to this problem is spend, spend, spend. Circulate money. Make money available to all than having it yourself without any outcome.

Different cause for World's Problem!!!

We all know, now the world is meeting its old friend"Recession", there are lots of reasons given behind it by many experts. Some of its reason which we felt caused recession has been listed out as simple as it can be done.

Current recession has been caused by high oil prices inferred from a recent report by CIBC chief economist JEFF RUBIN

Recession took its victory under the lead of oil price. The rapid fluctuation in the oil market made the countries to have a sit back in its economic position. Well before the other nations entered the recession Japan and Euro zone rushed for it.

Oil price changes had a close effect in stock market too. The invest made by the investor had an adverse effect over it,which reduced the values of investments by 40%. The world's strongest economy, U.S withstood this to some extent in the beginning but not fully,the other nations which were depending could not bear the stock fall which made them feel the heat of recession.

The fundamental cause for this recession is the regulatory norms followed by U.S.for the past two decades U.S had a low inflation rate. Which resulted it to ignore the completely basic economic cycle. This was first visible to united states 20 months ago,when they were trying to control the excess liquidity in the market. Then came the fall in their real estate. Amazing fact is that the real estate fell as much as, an house can be purchased in California for Rs.98000 which had a same effect all over the world.

The next main cause for this economic problem is,the world so called strongest bank failed maintain its position and was judged insolvent,it was none other than "LEHMAN BROTHERS". Its unsound idea to purchase a asset worthing more than its reserve caused its great fall in the industry of banking.

What so ever the reason may be for the world's fall the one who suffers are the developing nations only. Lots and lots of people are being driven away from jobs and result is fall in the economic level of the nations. The only person who get good job even during this time of recession are charted accountants by the name of cost reduction every company is sending their employees out and have also freezed their recruitment. With the worst economy policy of the U.S. every nation depending on it is now facing a lot problems which they are not able to manage.