Did you breathe a sigh of relief when Federal Reserve Chairman Ben Bernanke announced the recession was over? I didn't think so. You have a queasy feeling in the pit of your stomach which says too many bad things are still rising, such as unemployment, bankruptcies, and foreclosures.
Even IF the recession is over (notice the big IF), the crisis is not. "We are in the chronic phase of the crisis. The real crisis is systemic," according to Jim Wygand, Principal Partner at Critical Corporate Issues, an international risk management consultancy. Mr. Wygand points out that debt was driving "a whopping 25% of total global consumption."
Now that Americans are cutting back, and the U.S. government is maxed out, on debt, China and emerging markets will have to increase their own consumption to keep their factories running. Wygand recommends that businesses will need to become smarter about developing products to supply both emerging and developed markets. Be prepared for more economic hiccups as banks and the government try to manage their way out of what had become a debt-financed economic imbalance. The global economy didn't topple, but it is still wobbly.
- Americans Keeping Credit Cards in Wallets
- Banks Must Stop Record Foreclosures
- Bankruptcies Double in Three Years
(Photo Credit: Joe Raedle /Getty Images)