The financial meltdown might have tumbled many of the largest Wall Streeters but has left a big mark on those who had no otherwise bailing out scheme.
There have been many positions that were left highly vulnerable to the slowdown and even after the collapse of the system the recovery is crippled. Even as we aggrandize the position of the Western colonial powers since the advent of the twentieth century and how they drove the making of the world map the real West can never be forgotten even if they stand in ashes. Past the world wars this great recession has nailed in the final jolt in the coffin of the likes of Portugal, Spain, Greece and Italy. PIGS as they are called are running high deficits and running a crunchy economic system which is bound to spread over the entire Euro area.
On an apt scale if the entire European Market is analysed it can be conferred that neither of the old financial monarch is stable enough to control market sentiments and countries like Italy are running huge deficit which control more than ten percent of the European market. Added to the fact is the sick man of Europe himself the illustrious United Kingdom that stands over a staggering 167 billion USD of deficit with no clear picture from the government side how is it going to undo it.
It is like a rain in the sunny shadows that country of the like Britain might turn up the de-accelerating machine of the European Union. With Germany adamant and still confused to handle the debt of Greece and the topic is in discussion since December what would be the case if Italy defaults or maybe United Kingdom. The financial meltdown has certainly brought in the descent of the West and the resurgence of the East but overlooked what has all went down in the process.
It has been nearly three years when the bubble has started appearing in the housing market that lead to the huge spat on the market but all this time since lots has changed around. The recession that came in Britain was by far less severe than what happened in Germany or Japan but its after effects and the its foothold there has definitely been steady. How do we account for a recovery if a 6.2 percent of negative growth still sustains in this region.
The main flaw in the British system is cited in its prolonged earmarked methods of moral descent. Its vulnerability is explained by its huge spending measures undertaken by the last Gordon regime which nobody has been able to curb or show any control on. Gordon Brown assumed the British economy worked more or less like a compressed rubber. It was bound to regain back its original stature once it lost its flow. This however was not the case.
Even since the European Stirling was brought out of the European Research Mechanism ( ERM ) in 1992 that curbed its control of Germanic money flow and made it an independent entity it suffered a downturn but has been growing ever since. The growth of the British currency has been such that the government has been taking debt on the counter. The only reason that can be figured out is that the high profligacy and over optimism of the Gordon regime has pulled the British economy deeper into the debt. The height of misleading financial growth and selling of bonds to control debt has led to a staggering deficit which the government is finding very difficult to contain.
The budget deficit amount is the highest in the G 20 nations and as elucidated that the recession was not severe in United Kingdom. The Sterling has fallen to one fourth of its value since it all began and has not regained its original strength. The economy has contracted by around 6 percent by the end of 2009 in six fiscal quarters so the path is more or less bleak for economic cauldron.
This British exuberance has led to an over indebted private sector, over extended investment banks and overweighed public sector. All three of them created more or less due to this over optimistic attitude of the government. They have extended the nation debt and brought in all the public sector companies under the scanner, the high investment activities curbed the fiscal flow after the recession leading to their bailout and the slumping consumption is affecting private growth. In short the British are spending more than what they are gaining and the gap is widening exponentially.
At the moment the gap is like for every four pieces spent three pieces are earned. The equation is nothing close to equality. The polls are getting closure and the economic position of England is showing no growth. As I said the Stirling has been continuing loosing value but it is not able to cash upon this loss. Due to the market slump and curbed spending people are not in a mood to eat.
Therefore even after being such a resourceful manufacturer, the world’s sixth largest manufacturer it is not able to spend able to earn a dime over its deficit. People are not ready to buy anything and hence the slump is continued. The inherent condition of the British economy is that its manufacturing is working recklessly taking money from the market but when it comes to sale the people are not ready to consume because of the meltdown. The recovery of Britain as explained has been the worst. The employment still hangs by a thread and there still not enough money in the system to drive a fruitful change. Even with the government subsidies and policies substantial change has not been able to bring into the system.
The housing subsidies and the stimulus might have reduced the deficit from 178 billion pound to 167 billion pound but still the number is monstrous. As a closing note it would be wrathful adding that Britain goes to polls on May 6 and this would be the first time Liberal Democrats are going to have a say in making of the system. The Gordon Brown has not been able to contain any of the problems put to them and on the contrary the problems have surpassed historic levels.
The situation has gone from bad to worse so the future has no clear mandate. The slogan is real change through hope optimism and tangibility but is not this same attitude that brought down the British economy??
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