Tag: recession

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A 19.7 drop in GDP. Imagine that


And you thought your country had problems… Imagine this: Singapore reported a blistering 19.7% SAAR* GDP drop in the first quarter of this year. That comes after the 16.4% registered drop in Q4 2008. I guess that’s the price you pay if you’re a one-trick pony. Which in this case is Singapore’s dependence on its financial sector. It will take the island state years to recuperate. If they recuperate at all.

(*:SAAR stands for Seasonally Adjusted against Annualized Rate)

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Analyses

The balloons must be emptied first

For approximately 30 years, the world allowed credit to balloon at least ten times beyond the size of the world’s true economy. Gigantic companies financed themselves with credit, even ran their daily operations with money they had loaned. That wasn’t surprising. Taking out loans was rewarded with fiscal deductions, positive interest rates, and a rich variation of other rewards and instruments. And then things went extraordinarily wrong.

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Analyses Voorpagina

The end of the system as we know it?

Not for the first time, and certainly not the last, the world is facing yet another economic downturn. Normally, this shouldn’t pose much of a problem. Economic downturns are harsh, they tend to hurt a lot of people, but as a general rule it also acts as a sort of weedcutter. It cuts out the bad weed that was ravaging your garden and led it into trouble in the first place.

But there’s a problem. For the first time, we are in danger of getting into something we can’t get out of because the reliable machinations don’t work anymore.

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