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Prof.: Mrs. Parul Kochher

DISCLAIMER: This article is a narrated article. It was originally published in a Punjabi News Paper Daily Ajit in 9th September, 2011s issue. No personal interest of narrator is written in this article.

Author of this Article: Gobind Thukral. URL of Original: http://newspaper.ajitjalandhar.com/index.php?edid=4&dtid=20110909

What will be the consequences of current crisis in America?
American Economy is clearly giving a sign to incline towards recession. Rate of increase in employment was 0% in the month of August and the interest receiving rate was 2 % on the Ten-year US Loan Letters issued by the govt. which is least of till date. Day by day the loss is setting new records. But America is wasting its billions of dollars on Iraq & Afghanistan and killing the people over there. Till date the expenditure of America on antiterrorism fight has crossed a mark of round about $ 68 Billion. This is matter to think for whole world not only America. The trade dept. of US had made a calculation which shows that only 2.7% growth in GDP of America has been accounted in the month of July-September where it was 5.6% in the month of April-June. There is a debate going on among the economists of the world that Is America capable enough to bear up this decreasing trend of growth rate & it not affect on employment on huge basis. The economists announced that the decrease of inflation in the growth rate of Economy is acceptable up to 70% but not to the extent of 30%. Non-acceptable loss will create a panic of non-stability in the market and increase inflation, which results in decrease economic growth rate again and also unemployment occurs. The decline in American economy will not be a tragedy but it will be a common thing, and everyone has to prepare itself for such happening. The economists are silent on that on which this tragedy can take place. The Share Markets of whole world are declining, unemployment is increasing &
Narrator: Satinder Shah Singh [Triple S] Page 1

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Inflation as well. This is generating troubles for the people. This is creating a social & economic instability. Asian countries, especially like India & China which are growing on very fast rate on economic basis, what will happen on them of this economic downfall? America is a biggest trader in India. Huge FDIs are coming to India from Americans and Indians have plenty of job opportunities in America. That is why the downfall of America will surely hit India anyhow. There is a huge import as well export between India & America. The economic downfall is already accounting losses to the nations who trades with America. This can affect the trade between the two. The trade of India with European Unions & Developing Asian Nations is restricted and balanced to some extent because of the result of huge trade of India with America. Indians mainly import consumables. America occurred as a biggest importer of the software technology of India. Because this new economy of India is mostly based on outsourcing, that is why we can feel & understand the ground realities of the situations. But some people quotes that jobs becomes less in the scenario of Economic downfall and the companies invest just only to be remained & in running position in the market. Though there can be a growth in the software & IT services sector. But if the downfall is overcome then the upper quote can be proved wrong. The statements of the experts are saying that the Trade of the America will be restricted only to outsourcing and it will forget the policy of business exaggeration. In result of that the BPOs and other related services most probably comes in trouble which contributes 2% of the GDP of the Nation. But the growth of Asian countries & the trade of India with Non-US markets can help India to come out from the trouble. Instead of this if the Crisis remains in America then it will surely affect the economies of all the Nations of the world. England, France, Italy, Germany the contributors of US in Europe are showing a downfall trends in their economies. China, India & powers like South Africa are showing an upward growth on this note. It becomes very interesting to watch this economic downfall in todays scenario. No one even has been predicted this that the America the leader of Capitalistic countries will and is requesting to a Communistic country that it help America to come out from this recession. Chinese leaders, which are very well aware from their powers American crisis, was advising America from a long time back that it has to take care of its dependency on Credit and has to accept the mismanagement in its organizational structure. China has a liability of $ 1170 Billion in the terms of Credit letters towards America. China is using its financial
Narrator: Satinder Shah Singh [Triple S] Page 2

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power in the form of Political weapon. It becomes very powerful in recent times because America is in crisis and China has plenty of resources. Though China has only 8% share of credit given by America to the whole world but beyond this China is big source of money lending for America. If china stops purchasing credit letters or the value of dollar is being appreciated then the piled stock of dollars held by China will become useless. That is why China also wants that America should has not to go to the crisis. China is very to decrease its dependency on American Dollar and to do this China has to internationalize its currency. But this is also true that control to overcome with inflation will become more difficult. The important thing apart from this is that that Chinese wants to provide a turn and concentration of their economy to their internal market. To satisfy the demand of their nation they are providing wages & minimum pension. The economy of China was growing at a rate of 9% - 10% from last 30 years. Now it is one of the biggest producer & exporter of the world. There is an assumption that Chinese economy will overcome the US economy before 2027. Other Asian countries also have the same story as along with China. India can benefit because of its vast area and great population. It is also a one step ahead and a competitor country in the race of technology. Its GDP has grown with an annual rate of 8% - 9%. To overcome with the growing demand it has to increase its supply as accordingly. All are saying this thing also that America is politically & geographically safe and rich in technology. It has an A grade teaching methodology. If it rectifies its political intentions it can come out from the huge crisis. But it has passion to show itself as a leader & superpower of the world. Phone: 0172 - 2556900

Narrator: Satinder Shah Singh [Triple S]

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