The subject of the economic collapse of late become synonymous with leading media outlets clearly indicating an impending financial disaster evidenced by the worst stock market performance since the Great Depression in 1930. The poor performance in the stock market has been marked with increased volatility in stock prices and termed as the most unfavorable Christmas Eve in Wall Street. To make the economic situation even worse, most economic analyst including Mark Jolley is pessimistic that the situation will still get worse in the coming year as the situation is only at the first half of the global equity bear market.
The ailing economic situation has occurred within a brief period as in 2017; the stock market was at its best only to get worse in 2018 after the global economy took a new turn putting investors with their investments at stake. The financial crisis linked to the bear market is not only being witnessed in the US alone but in many stock markets across the globe which even started declining way before the situation was felt in the US.
Currently, the bear market is estimated to be at 20% of the recent market peak and has significantly disadvantaged investors across the globe. The effects of the bear market are being felt in Germany’s DAX, China’s Shanghai Composite, Japan’s Nikkei and the Nasdaq Composite in the US which closed in a bear market last year.
The current bear market is regarded as the worst since a decade ago and even predicted to get worse if the financial authorities and central banks to don’t implement the necessary measures to resolve the situation. Nevertheless, some financial bodies notably the Federal Reserve have intervened the situation by increasing the interest rates in the midst of the unfavorable economic conditions raising unanswerable questions. The move by the Federal Reserve is seen to benefit a few individuals will still putting investors at stake as public participation was absent.
Economic analysts have stated that the best way to resolve the situation would be to increase government expenditure by individual governments. However, most governments are struggling to repay their international debts which have skyrocketed in the past few years especially in Africa making the situation unbearable.
The problem of international debt does not look good in the US either. The country has immersed itself in massive debts with trillions of dollars being added to the national debt yearly from the start of the financial crisis. The overall effect is that the total national debt has doubled within ten years leading to worsening economic conditions.
While the US national debt is palpitating currently standing as $21,863,635,176,274.12, the country plans to build a border wall between Mexico and the US at a massive cost of more than 5 billion US dollar in addition to giving aids to other countries. The truth is that the country is committing a national suicide through borrowing as there is no room left for induced spending. If appropriate measures to control the rapidly increasing national debt are not taken, the country will undoubtedly have a bleak future with a weak economy.