Enlighten Me On Recession

1) What caused the current recession?
Before 9-11-01, US made interest rates on loans very low. This caused people to buy. Even though, in most cases the consumer receiving the loan, could only afford it due to these new interest rates. When a national tragedy occurred such as 9-11, the economy was in a blunder and caused rates to sky rocket. This made the people that made the irresponsible choice to take the loan, unable to pay their loan. So it is a case of money going out, and not being returned.
2) If the recession is man-made, it should not be difficult to fix. But apparently not. Why?
This is man made. But not an easy fix. This whole problem is due to people living outside of their limit. Until people can take responsibility and quit pointing fingers, this problem can not be solved. Our government talking with no action isn't helping the case. They are talking to the gullible, and the gullible is where the problem lies.
3) How can a US specific "home-loan mortgage crisis' cause recession in other countries?
Well this goes to the topic of exports and imports. US is one of the world's leading importers. When people do not have the money to spend on goods, they will not go out and buy as much. When people do not buy as much, not as much products are imported. When a country heavily rely on us buying their products, they were ruined from our housing crash.
4) What 'exactly' caused/causes recession? How can it be fixed so that there is no recession in future? How will recession be fixed?
Recession is the result of poor choices, poor budgeting, poor advisement, and poor investing. Encouraging life styles that are not applicable for a certain budget causes all of these. When it comes to fixing it, all it is is a reality check, people have to come to grips with their budgets, and apply them to the market as they see fit.
5) Is it in the nature of capitalism that recession will happen (just like growth will happen too)?
Yes, it is in the nature of capitalism to have recessions. But with this downside, you can have a large and spanned time of prosperity that is not found in socialist situations such as Communism.

7 comments:

  1. im kinda worried abt this recession probs too. yet, i keep on investing monthly. *sigh*

    maybe we should start buying gold? dinar emas. uhm. :|

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  2. i've been asking myself several times before this about how this whole recession thing started. thankfully now i know the fact.

    at my workplace, a whole lot of surprising things happened. people get fired without notice just as they are about to start working for the day. some of my colleagues were moved into different department in just a day notice to cut cost which is really a sad thing. and this monday, a whole bunch of workers are going to be fired again. this recession thing is damn scary stuff.

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  3. yea, correctt. i got some friends who cant even get to do their internship. let alone, to work. *sigh*.yup, ofcourse ade jual dinar emas. its kinda everywhere. but im still thinking,tho.

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  4. hoh...kalo ada dinar emas mcm nk beli (berangan jap)...haiyo,i hope my internship will be ok coz it's a gov company.

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  5. dont worry, gov will be as fine... or so i think... :)

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  6. ye btol....tapi tuh making loss company.

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