Recession in the US

It’s not looking to good for the most powerful economy in the world a recession has apparently started in the United States. There has been a severe contraction in the US service sector a vital part of the economy. The European economies like the rest of the world are closely tied to the US. If the recession in the US has started then a world recession has also started. The Stock market crash of 1929 not only caused the great depression but also heralded a world recession. There are those that that would like to pretend that the Dollar is not the dominant currency in the world. This would mean that the United States economy was not the dominant economy. George Soros is of that opinion that the day of the Dollar has come and gone. All the anti-American browbeating will not change the economic realties of the world. That would be the dependence of  the world economy on the United States Economy.

If one follows the fluctuation of the different stock markets they almost always mimic the behavior of Wall Street. If the United States has entered a recession as all indicators say they have then some very simple things will happen. Large banks and Lenders will be lending out less money therefore making less money. As this happens European banks heavily dependent on cash flow from US banks will also feel a cash pinch. This shortage of money will send the price of money up choking off businesses and leading to further economic woes. There has been an attempt to jump start money flow by lowering the fed interest rate this would make the cost of money a bit lower and more attractive. This policy has its limits though it has slowed down some of the negative indicators. Rocky roads seem to be ahead probably not as bad as some analysts have said. Hang on to your hats and money.