Will the US economy face recession again in 2011?

Where is the American economy headed?

Undoubtedly, recovery expectations have increased in recent months, mainly thanks to stimulus packages and the proactive stance of the government. But this does not appear to be a long-term solution to the situation, as the debt is mounting and will soon accumulate like a mountain of worries. Everyone is aware of the situation, but every effort is being made to keep the economy running in the short term.

Is the debt problem in America really intense?

It is really difficult to say if the economy will collapse in 2011, but it is almost certain that if the government continues to spend on temporary aid packages to stimulate the economy, the mounting mountain of debt will lead to the greatest financial disaster ever witnessed by mankind. Today, the US government, businesses across the country, and American consumers are sailing in the same boat, heading toward an iceberg. If you don’t agree with what is said here, read on for the hard facts.

Will the housing market recover in 2011?

Mortgage defaults continue to appear fresh on the market, keeping house prices near record lows. Defaults have been record high and have continued to rise since mid-2007. What if house prices don’t show a significant recovery in 2011? Well, many economists are of the opinion that the housing market may not show any signs of improvement until the end of next year. Now, this could result in a second wave of foreclosures, making the cracks much wider and hopes for a recovery shattered for a long time to come. Are consumer spending and employment status still a threat? Ideally, a recession is a temporary slump in economic activity, but this time it has lasted much longer. This is clear from the employment situation, since unemployment data does not improve despite so much quantitative and qualitative easing on the part of the monetary authorities. The latest stimulus package has provided support to financial markets as investors believe this money will help create jobs in the system and as an end result, consumer spending will rise again. But, so far, things have not worked out as the Fed expected, and the same could be the case once again.

Are Americans bankrupt?

There is no hiding the fact that more and more American citizens are filing for personal bankruptcy. In such scenarios, how can authorities expect demand to surge again, when people are heavily in debt?
America simply needs jobs, and it needs them at a much faster rate than anticipated. The recent recession, which is now officially over, may have been an indicator of an upcoming depression in the system, as it was much more than a recession is. Now, if we slide back into negative growth, which cannot be ruled out so soon, then economic chaos will spread its wings globally and the world will spend a decade with flat growth.

Investors and traders need to be prepared for such financial turmoil in the short term. Even saving on brokerage costs, by opting for cheap online discount brokers, can help maximize returns in such uncertain times.