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Investments => Financial Markets and the economy => Topic started by: The Prophet on August 10, 2011, 12:28:20 pm

Title: Are we heading for a double dip recession
Post by: The Prophet on August 10, 2011, 12:28:20 pm

With the US economy shrinking 5.1% overall, the recession in the US was 25% worse than first estimated. GDP adjusted for inflation was lower in June 2011 than it was in June 2008.

Normally after a recession, growth will have reached 4%-6% with enough impetus to continue recovery. The US is forecast to grow just 2% - 3% this year.  In the UK the growth over the last three quarters is just 0.2% with the Eurozone countries as bad.

The IMF has noted that once a country's debt to GDP rises above 60% the benefit to the economy of extra borrowing is negative.  As the ratio nears 100% debt to GDP extra borrowing actively starts to kill the economy as the population starts to fear for the future.

In the UK the ratio is already 80% and it is estimated that we have just 18 months before we hit the dreaded 100% debt to GDP. 

Title: Re: Are we heading for a double dip recession
Post by: Banjo on August 11, 2011, 09:45:39 am

Based on that Prophet it seems to look that way.