Deutsche Bank has painted an extraordinarily grim picture of global economic conditions, saying the planet is on the brink of further recession which could last for years.
This may come as no surprise to many observers, given the stagnant economic and job growth in many important areas, and chronic unemployment, debt and budget problems threatening to cripple the former cornerstones of the global economy.
Deutsche Bank did have some more positive words for Portugal and Ireland, which appear to be improving their debt situation, but other countries such as Italy did not fare so well, and the Greek crisis threatens to undermine the eurozone altogether.
While there is perhaps some good news on the European front, as European leaders work to approve a bailout package for Greece (despite severe austerity measures likely to damage the economy rather than reduce the debt itself), news on the American side of the Atlantic is not so good. The combined problems of massive debt, partisan politics, low investment and slow job growth are pushing more and more people into either poverty or other severe difficulties.
Deutsche Bank’s words of severe caution as to the economic outlook are yet another difficult indicator of how significant the problems have become, and how the economic recovery many world leaders are trying to effect (whether successful or not) is so precarious. People should have every reason to expect sustained difficulty, or even a real depression in the coming years, as the problems facing both Europe and the United States continue unabated. With little real attempt to address the deficit (as the cutbacks are likely to have a deleterious effect, by any estimates), as well as the minimal investment in new technologies, infrastructure, or job creation, on top of the hampered financial reform packages pushed through Washington in the form of the Dodd-Frank bill (currently under fire from the Republicans), means that not only are these problems unresolved, but the stagnant state of the economy is only likely to encourage investors to protect their assets rather than gamble on new investments; though others have continually stated now is the time to invest, it doesn’t mean the trough won’t extend itself for several years.
Unfortunately there is little recourse to reverse this trend. On the American side in particular, the financial situation bears the unfortunate combination of very little reform to prevent problems like these in the future, and if indeed there is a depression, there will be very little in the way of savings with which to stop it from damaging the economy for decades. As the record-breaking profits of corporations continue unabated, with record low tax revenue for use in schools, infrastructure, technology and other important areas, one cannot help but wonder what will happen if not only tax revenues but corporate profits fall to record lows; if there is no revenue on their part available to tax, the United States will be incapable of raising any revenue with which to extend any sort of lifeline to any services, at which point there will be no choice but to close many services that are critical to economic growth and stability. In other words, it might be too late soon.
Author Resource:-
Deutsche Bank Online Banking provides a variety of investment services for clients worldwide. See also those available from Bank of America Online Banking, which is garnering a great deal of blame for the mess itself.
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