International Trade Blog

The global economic crisis has had a major effect on the economic activity worldwide. Various markets have collapsed and a huge number of people have lost their jobs. So what actually is there to do during a crisis?

When the crisis hit everyone was ready to predict that shops would empty and go out of business due to the lack of customers with any money to spend. Some part of this came true, but only a part. Yes a huge amount of people lost their jobs and thus their income. This had a dramatic effect on the overall economic activity as there simply was no money to spend, but this is true to a certain degree because only some specific type of shops went out of business. We must remember one thing that does not change no matter what – people must eat. So to fulfill that need they must spend the money they still have on seemingly basic stuff like food. This is why only high end retailers experienced difficulties. Of course the number of newly bought cars decreased, but food and basic clothing numbers stayed the same. Actually the crisis did one positive thing it decreased the rather high basic commodity prices that were pushed to unrealistic heights due to the previous inflated economy.

Although currently everyone is speaking about the imminent recovery the economy is still in very bad shape. It may have won the fight with death, but still will need a lot of good doctors to fully recover if that is possible at all. What do we do for the time being? Everything that can be done to scrape by and pray for the glorious return of a healthy economic activity!

Yes the global economic crisis is still governing our minds and while some governments have taken the necessary steps to rejuvenate the economy some only issue bold and reassuring statements, but actually does not do anything. Granted not all countries have the necessary amount of additional money to inject into the economy, but there are always other ways.

Of course not every country is able to invest huge amounts of money into their economy like, for example, China, but nonetheless there are several economic tools which can have a positive and rejuvenating effect on the economy. Let’s take a look at the taxes. Many markets have crumbled and companies have a very hard time to sell their goods. Huge tax burden does not help either and so to cut expenses they have to downsize by letting go employees and thus decreasing their economic activity. The decreased economic activity on its part hampers the overall economic recovery. The best way to fight the economic recession is to drastically decrease such taxes as Income and VAT. While at the beginning it will surely decrease budget income, but as economic activity will increase, due to the lowered taxes’’ so will the income. Sadly many government officials do not see this way. Quite opposite, they are planning to defeat the crisis by increasing income with a substantial raise of taxes. Any half good economist will tell you that this is the most foolish action you can take in such a situation. Nevertheless government official still think that they are smarter than any professional of the field.

We need some drastic moves to be maid to overcome this recession, but these steps must be carefully researched and debated over. In order for any of them to work they must receive acceptance from the general population. Let’s hope that government officials will listen to the voice of reason.

The number of job appointments has increased for the second month in row. Sound like good news? It sort of is, but the overall situation in UK is far from picture perfect.

Although the unemployment level is the highest since 1995 that last two months have shown good promise. While job market is still very far away from booming one positive fact can be mentioned. It seems than the rate of job losses has reached its peak and that means that the unemployment levels will not drastically increase. Even more good news is that there is appearing more and more permanent and periodical new job opening which can be directly connected to the increasing stability. Many companies have understood that the country has withstood the hardest blow of the global economic crisis and has entered the path of recovery. The faster the stability level will grow the faster will the job market expand.

While the statement that the global crisis has been defeated did no actual good for the general population these news give at least a small ray of hope. Now at least the people have something to look for. While finding a good job is still a very hard undertaking at least it is possible no matter the chances. Three months ago this was not so. We have to grab hold of every little piece of hope or otherwise we might crack and give in to depression. Let’s hope that we will receive more and more good news all over the world.

Despite all positive predictions and statements that the crisis is over we somehow still experience and probably will experience for some time the ‘’magnificent effects of the global crisis. If not the crisis itself then we will sure feel the full wrath of its aftershock.

Global market has been crushed to pieces and many trade dependent countries are experiencing harsh times. Numerous jobs have been lost. Real estate market is non existent right now. Construction sphere experiences major difficulties. Basically the overall happiness levels have plummeted. What should we do in such times? Well the government should take care of us right? It should, but only in a perfect world. Sadly this is a cruel one. Its like a deathmatch – everyone fights for themselves. Even the government officials in the highest places have forgotten for whom they actually work and who pays their salary. The basic credo of today is ‘’hang to anything you can’’. Those of us who still have a job and a steady income should really feel lucky. Of course not everyone is affected by the crisis negatively. Some actually use the crisis to make profits not always in morally correct ways. Still they have found a way to make a living and on some level I admire and even understand them. What the future holds no one knows. Yes the crisis may end and it most definitely will end, but people tend to forget that the effects of the crisis won’t magically go away in one day. Countless lives may have already been inadvisably ruined.

What to do right now? I do not have an answer. Duck, cover and hope for the best could be my only advice. I really do hope that everything will turn out okay, but if it does not I won’t be very surprised.

The unemployment rate in USA has almost reached the 10% mark and currently stands at 9.8%. Although the economy has been growing for the last three months the unemployment levels have not apparently heard about that. While somebody might be perplexed about this situation I am not because I already predicted that this will happen.

Yes the economy is improving there is no denying that, but it is still only improving on paper and no actual improving cannot be seen. I do not think that this situation will greatly change in the next tree months. The unemployment levels will start to decrease only when stability returns. Stability will bring back consumer confidence which means more money influx into all markets. Healthy markets will create new jobs as recovering companies will need more workers to reach previous levels of productivity. When will this happen? Who knows! I hope that 2010 will be a good year and that certain stability will return. If the economy keeps it course then the companies will gain more confidence and thus decrease unemployment levels.

What can we do in the mean time? Basically nothing! Those who still have of job will do anything possible to keep it. Those who do not have a job will basically just do anything. The winter will be hard for us all so lets hope that the new year will bring better news that this one.

Despite the latest news from various analysts about the end of the global economic crisis the average US consumer still does not feel safe. Consumer confidence is down in numbers in comparison with previous months.

What could be the main cause for this? Yes the analysts say that the crisis is over and predict soon recovery, but in reality the everyday consumer still does not feel the difference. Basically the consumer is completely right because until now the recovery is still a recovery on paper. While different indexes and other economic tools might prove that the crisis is defeated in real life there is no actual change. Salaries are still low and unemployment levels are still very high. There are still no realistic guarantees that the unemployment level will not grow further and many more people lose their jobs. This is actually quite possible as for many countries winter is nearing and this means no more seasonal jobs. The consumers are very concerned about long term income as no one can guarantee that. I believe that the confidence will grow, but it will take some time. If you would ask me to predict I would say that overall consumer confidence will start to improve beginning 2010, but only if the predictions about recovery come true.

Nevertheless there is a positive change in the US market. Home prices are starting to grow. Although they are still far behind 2008 levels this is considered to be quite significant.

Confidence is very important and the only thing that can influence it is stability. The faster countries and the whole world itself regain stability the sooner the consumer confidence will return.

The next G20 meeting plans to call for serious changes in global economy. While the current economy shows signs of improvement, they believe that the improvement is too slow. While this may sound good we must remember that G20 have no actual real power. All will depend on individual rulings of various countries.

The main idea behind all these changes is that countries with huge debts cut their spending and increase savings. The only organization able to influence this process seems to be the International Monetary Fund (IMF), but only to a certain level as the countries with the biggest debt are USA and UK. So what really can the International Monetary Fund (IMF) do? The other step is for more saving oriented countries like Germany and China to increase their spending. While this may be a good idea as it will pump more money into the markets again there is no real organization that can enforce this. While German population may be encouraged to spend more I really doubt that the average Chinese will increase his spending habits considering the fact that they have to save money for health care and retirement as the national support is very low.

Yes global economy should be reorganized, but this reorganization cannot be forced. Countries must realize this on their own that something is not right with the current situation. If they do that then there is hope of a new global economy. If you ask me I do not think that the world is ready for this, at least not all of the world.

While some countries do not experience the full power of the global economic crisis some are hit the hardest. The biggest losers as always are the simple people. If a cut in salary can be considered lucky, many people have lost their jobs and only source of income.

What will you do if you do not have any money? While a small percentage may choose such drastic measures as suicide, most people will do anything to feed themselves and their family. They may accept illegal or dangerous jobs and some, normally honest people, might even turn to criminals. While I do not approve I on some level understand them. For the past six months fraudulence and scam cases have multiplied. People are stealing everything that is not tied to something. Everyday there is a story in the news about a robbery and what is the most frightening fact is that people have become more violent. There have been stories in news about robberies which ended in homicide and not that the robbers stole millions. Today the violence levels are so high that people are willing to hurt others for mere scraps. And all this happened during the summer months. I do not know what will happen during winter.

The same situation applies to scams. Currently the most popular scam in my country is to offer people jobs in foreign countries. When the person has paid the necessary money bought the ticket and traveled to their destination they find out that there is no job for them and the company who offered them the job has mysteriously vanished. Many people have been cheated this way. The funny part is that no matter the numerous stories in news about such scams people still get scammed.

The situation is very serious. If last year people joked about people who work for minimal wage then today most of them would kill for such an opportunity.

After four quarters of steadily decrease in economic activity, the second quarter of this year offers good signs for the overall economy of Japan. Does this mean that Japan has conquered the global economic crisis? Not yet, but they have embarked on the right way to do so.

As most national banks the Bank of Japan has been pumping huge amounts of money into the national economy to stabilize and improve the situation. Now they have decided is the right time to stop all these actions because they could hinder the natural recovery of Japan. So now the banks main objective is to strengthen the national currency. The yen has already improved its value against the US dollar. While this could hurt the export sector as one of Japans main markets is the USA, in the long term it is believed that it will benefit the whole country. Seems quite a risky step as export levels are already down and Japan is very dependent on the economic situation of USA. Although the technological and quality levels of Japan’s goods are up to date they should be vary of one fact. What if USA switches its full attention to China? Granted the quality levels cannot be compared to Japan, but the costs and quantity can be very attractive for US importers. None the less these are finally some good news for Japan. If the global situation keeps improving then Japan surely will overcome the global crisis and reach total recovery.

Of course this will not happen overnight, but these are the first good signs. I really do hope that Japan succeeds in their recovery plans as I believe that Japan is a vital part of overall global recovery. The faster this happen the better for us all.

While most of the people tremble before the global economic crisis for some it is nothing special. And why should it be? They have experienced this crisis all their life and have survived it.

I am of course speaking about people it the third world countries. Maybe not only the third world as most post soviet countries are in the same position. Let’s look at the post soviet era countries. While most of them have valuable natural resources the quality of life has not changed very much since the soviet times. During the soviet times the salaries were quite small and even if you were a lucky one with a bigger government official’s salary there was still the utter lack of goods. It did not matter how much money you had as there was simply nothing to do with it. Shops were empty, private business was more or less illegal and real estate market did not exist as such. So it was basically a crisis. None the less people survived I would even say more; they were happy. Yes they did not have very much, but nobody had and it was ok. Ok yes there was one thing different from today. There was virtually no unemployment. The government spends a humongous amount of money, but everyone who was willing had a job and was played for it. Of course from the economical side point it was a total catastrophe as the economy could not sustain itself and eventually collapsed.

After the independence was gained not that much changed. Yes a handful of people became very rich even obscenely rich, but most people still had low salaries and were forced to struggle. Of course now the difference was that the shops were full of good. If only there was the necessary money to actually benefit from this fact. But no matter what people survived and still were quite happy.

The general idea behind this entire rumble is that no matter what we will survive. Sooner or latter the crisis will fade and the quality of life begin to rise, but of course not for everyone. That’s just the way of life.