All world stock markets are raging. The US economic recession has been a severe blow to the world. Financial analysts say that the USA is the main reason behind all financial problems in the world. Many of them say that it is only the beginning of the crisis.
However, other specialists simply laugh at those who panic. They believe that there is no recession in the US and there cannot be any. Nevertheless, they see a positive side about the present panic: best shares in the world are now available at very low prices, which is an extremely low occasion.
Successful U.S. investor Jack Miller feels certain about it. He receives great profits from fluctuating markets and recalls US post-war history of the USA.
During the past 50 years the USA suffered eleven crises acknowledged as recessions. They were caused by significant factors, and their consequences were much more serious than the present ones.
The 1945 recession was caused by the end of World War II, from which the American industry profited openly. The war ended, and former soldiers turned into the unemployed. Later the American economy suffered from the Cold War (together with expectations of the nuclear apocalypse), the Korean and Vietnam Wars, which was disastrous for the USA.
The rising prices of oil created economic crises in the USA in 1973-1974, 1979-1980 and 1981-1982. The recessions in 1990-1991 and 2000-2001 were associated with the investment crisis, or in other words, with the unjustified hopes of investors.
Peculiar features of recession include the rising unemployment factor and the decline of production.
The previous crisis between the two centuries (which is considered a mild crisis) was characterized with the six-percent reduction of the industrial output. The current situation shows that the production in the past quarter increased by two percent, it did not drop at all.
Jack Miller also calls attention to the unemployment rate. A rise in unemployment by basis points (up to five percent) at the end of 2007 caused a drop in stock markets before the New Year holidays. However, everyone chose to forget that for the past 50 years the average unemployment rate equaled 5.6 percent, and during the crisis it fell up to 7.6 percent at the most.
This cannot be considered a recession, claims Jack Miller looking at the fundamental rates. The air traffic performance is rising, which the investor considers to be the major index of the economic and consumer activity.
Experts say that the expectance of falling consumer costs is the factor of the forthcoming recession. It resembles the statement that the general hankering for diets will urge the average American to lose ten kilograms, says Miller.
Personal incomes rise as jobs increase. We can hope for that due to the rising industrial production.
Miller associates the present fluctuations on the world stock markets with usual economic cycles. The overheated economy of China and oil-making countries is slowing down, which means we are about to experience another rising cycle. Jack Miller recommends buying cheap shares right now, because soon their prices will restore.
Actually, the USA seems to benefit from this recession that “never happened”. As we have already been assured, the fundamental economy indexes are going up. However, the Fed cut its rates down to 3.5 percent and caused unusual global approval. It may cut them down to 2-2.25 percent, thus giving American businesses and consumers very cheap credits.
Besides, such action will inevitably result in the weak dollar (now it remains in the pre-crisis against other currencies, and this makes the US currency required) and in great advantages for foreign exporters.
Already now the US export-oriented companies are counting new profits. Thanks to the cheap dollar, the US economy managed to first start reducing the foreign trade deficit. It should be mentioned that the USA could not redeem the credit balance of the foreign trade.
Everything leads us to believe that the USA will overcome this crisis, or recession whatever, and will become even stronger than a year ago. At least it looks set to suffer fewer losses than the rest of the world.
Translated by Julia Bulygina