United States and Recession

[Jeremy]

The war currently is strangling our economy, putting the United States into a recession. I've currently lost about 300$ to the stock market, for it's crashing too fast for me to have pulled out. I had stocks/shares in Verizon, Arco, and Kroger.

The problem here is known as the "bear market" this occurs when the economy is down - high unemployment with a decline in investors. Also the lack of "dividend Reinvestment plans, or DRIPS. This is a company or companies (very many of them) who allow the buying of stock directly from them, basically reinvesting of any dividends when you purchase additional shares. And normally this is done outside the United States, which therefore; puts more money into our economy. Most of the wealth accumulated that is 'excess' comes from foreign countries. Now, you see the war is contributing to this as a negative. Foreign countries are looking at the United States right now, and deciding not to invest in any huge manufacturing businesses due to the steady rise in our economy debt. Normally war is a stimulant, but without foreign affairs, the economy is currently in a steady crashing like manner.
What a lot of people don't realize is recession can make or break a civilization. What happens is prices go up, more lay offs, less money people will be making, and more people losing their houses due to high interest rates.

This 'recession' will last 8-11 months and normally destroys the stock market for months afterwards. For a lot of investors right now, they see this as an opportunity to make money; yes I said it they are actually going to make money from this!

Very simple, this strategy is very similar to the "trickle down effect" (Google it, not going in depth) Where they see a corporation, or business in bad times, or a RECESSION. What these investors will do is wait 8 months or so, and then buy thousands of shares, and stocks for companies that have crashed the most. this is called a 'quick turn' where you buy mass for cheap, sell mass for a nice 500-800% profit. This type of profit is extremely rare, for normal circumstances, shares and stocks at most will drop 40-50 % net value. Recession is a whole new can of beans, the recession will take shares of stocks to a whole new net value level, and this is called "evening the market"

Some other reasons for a recession, or a 'stock crash' are related to an overwhelming amount of investors, all investing at the same time. Now, this is good for only a certain amount of time, for the stock market is rich with wealth. As people buy, they will eventually need to sell off for a quick profit. Remember 'black Tuesday'? (October 1929 to the late 1930s) People were using 'profit negotiations' to barrow money from these brokers. People would then take this money, and buy an excessive amount of shares. So on Tuesday, October 1929, everyone sold off there shares, and the opening price of stocks plummeted 900%! People were then in debt because they lost all there money, plus they owed these brokers 10,000$ or more. This caused a depression, and a stock market crash. This put the United States, and related too into a recession.

Now there are a few ways you can attempt to save an economy in recession, or heading towards it. Tax cuts for big businesses. This giving big corporations more money, so they can hire more workers, and inevitably buy more, implementing more of a demand for assets. More money people have, the more people will be buying, and the more the stock market, and economy will be stimulated. War is a huge drain for money, and is good when the economy is already doing fairly good. For it succeeds in supplying demand for things such as; weapons, amour, metal. Which infact help the economy, but when the economy and the stock market aren't doing well already. This only adds to the debt of the economy. Another way to help is for us to use our own reserve money to buy government bonds - Buying bonds translates to income for the U.S. government, which puts more money into the economy. Meaning, put money into bonds, which grow and prosper in wealth, and value of a certain amount of time.


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[Con1887]

Sorry that I am replying to a old topic but i would like to post something about this.

One problem with the economy is that when money becomes scarce people tend to spend less(obviously) and banks lend less money in return worrying that they won't get it back. We need people to spend regular amounts of money so people don't lose jobs at a faster pace like they already are, also with the help of the Stimulus package of $787B and giving to states that need the money to keep jobs and possibly make more jobs which is a good thing.

My sources were Google and the News.

[Triniboy]

When I was on Google when I saw this.

The US flew nearly $12b in shrink-wrapped $100 bills into Iraq, then distributed the cash with no proper control over who was receiving it and how it was being spent.
The staggering scale of the biggest transfer of cash in the history of the Federal Reserve has been graphically laid bare by a US congressional committee.

In the year after the invasion of Iraq in 2003 nearly 281 million notes, weighing 363 tonnes, were sent from New York to Baghdad for disbursement to Iraqi ministries and US contractors. Using C-130 planes, the deliveries took place once or twice a month with the biggest of $2,401,600,000 on June 22 2004, six days before the handover.


It also shows that even though the country might make back it's money and come out of a recession...A very great amout of goverment Tax money and other resources.

Over 15Billion dollars from New York were spent, and a average 598B dollars the entire US has spend...Thats a lot of money. :-\

[I pooN I]

Also because of the war, we are now $53 Trillion in debt. Man I can't wait for my generation to pay that all off!  ;)