US economy recession

[Andrewz]

Recently, one of the biggest US banks Lehman brothers has gone bankrupt. It was an unexpected and unwanted surprise for American ordinary citizens and of course investors. The Government took actions and wants to buy holding of shares for saving the bank's clients, the number of whom is very big.
Yesterday, Bush decided to invest 700 billion dollars in the US economy for healing it. Do you think it will help and the crisis will be avoided?

[Nicholas]

It will surely slow down this domino effect. But by printing more money, USA will face another problem: inflation

[Terry]

It will surely slow down this domino effect. But by printing more money, USA will face another problem: inflation

Oh Nicholas, you are thinking logically but you didn't take into consideration something. These money won't be "printed". USA has reserves of hundreds of billions. These money are already "printed"

[Big_Becka]

What is more worrying is that the US / Republicans tend to be against government intervention in the economy: they prefer a laissez-faire approach.

If these private companies need government support, this undermines capitalism. Which could have some frightening political consequences?

[Andrewz]

What is more worrying is that the US / Republicans tend to be against government intervention in the economy: they prefer a laissez-faire approach.

If these private companies need government support, this undermines capitalism. Which could have some frightening political consequences?

is that so? I thought it is the Republicans who want changes. Recently I heard Obama claiming he doesn't support Bush's initiative of injecting 700 billion dollars into the US economy.

[Big_Becka]

It is my understanding :-) I heard that the Bush administration were advised by leading economists to intervene. But the Republican party are divided on the issue, with some leading Republicans being against the intervention.

As for Obama - I don't know. The Democrats are more left-wing than the Republicans, but they are still not left wing in the same way as Socialist/Labour parties in Europe are.

I did find this article, which is interesting:
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[M.Helen]

The Government's intervention in the US economy had given a hard effect to the world economy. The dollar suddenly began to rise and it strengthened its positions against EURO and GBP. Or maybe these are the European markets which lost their positions due to the domino effect.

[Hakan G]

I prefer to see the dollar going up than loking to the world economy going to the bottom. BTW today was the first day stocks and other financial instruments were on the positive side, sharping their way up to 11% in NY. However Japan markets remained pesimistic, and Japan is one of the most important market when it goes to credits, so this might be an overall bad sign.

[Benn]

The world economy is suffering too much this year. Today, many experts claimed they doubt that the world crisis can be stopped. Shares and stocks keep depreciating, transnational companies are closing their factories, unemployment rate increases, prices go up, no stable crediting trust. The New York stock exchange closed today with several points lost.