We are on the brink of another recession?

Europe and America are on the brink of recession, according to the bank Morgan Stanley. In a research note titled, rather disturbing, the investment bank means that next year the global growth forecasts are still for almost all major economies, not only in the Eurozone or the U.S. but also China and 'India.

In a sense, this analysis is absolutely right, because the world economy is facing the prospect of a new downturn, perhaps it could be worse than the first. And 'know that the crisis is not over in 2008, given that bank loans have been transferred over time, leading a much larger crisis. It 'also known that the major economies of the world can slow down again.

But we must consider that the prospects for growth around the world are far from equal with each other. To understand why, we need to look at the data of growth of money. These statistics measure the amount of money that revolves around an economy. The Bank of England checks these statistics and economic theory says that there is a direct relationship between monetary growth and the increase in GDP. So if you look at the rate of monetary growth, the study shows that the real problem is not in Europe, but in the U.S..

Yet, despite the economic crisis, the European Central Bank has decided to raise interest rates twice in the 2011, putting new pressure on people. The decision to raise rates this year was, according to many, one of the most egregious errors of monetary policy in recent decades.

Britain will face further phases of the storm, but so far, remains the country that is better than anyone. Borrowing costs remain low, the economy is expanding, albeit slowly, and it is believed that Britain is one of the few countries not on the brink of recession.

Posted in: Economy