United States Economic Crisis (part 1)

United States Economic Crisis

1. Economic crisis The crisis has a broad understanding, in the opinion of the Harberler crisis in down-turn or the upper turning point (James Arthur Estey.1960: 65). According to Mitchell's economic crisis

already experienced / rather recession (rather than recession).

      Integration of the world, a shift in value that occurs within an areaseems to have an effect on other countries in the world that do international trade. The collapse of the supremacy of the United States is now threatenedrecession, it is possible to have an impact on the economies of other countries in the world. America is a super power that has economic power strongest in the world, and contributes around 20-30% of turnover world economy. The United States economy has a GDP of US $ 13.1 trillion equivalent to 20% of world GDP in 2007. The GDP of the United States experienced third quarter increase of 4.9%, even still having high consumer purchasing power (IKK 90.6), apparently unable to sustain its economy due to the credit crisis in the mortgage market worth US $ 1.8 trillion. Recently The United States experienced an economic downturn and faced the presence of competitors especially in China and India, but still still has a strong influence on it world economic arena.

          Since the beginning of March 2008, there has been a surge in the number of losses experienced by banksestimated world investment reached US $ 160 billion, and is predicted to remain continues and potentially will penetrate US $ 300 billion, even analysts Monetary estimates estimate losses could reach more than US $ 1 trillion. In reports from the International Monetary Fund (IMF) and IBRD sessions attended by the minister finance and Governor of the Central Bank 185 countries on 12-13 April 2008, as well as G 7 meeting in April 2008 in Washington, ensuring financial losses due the American subprime mortgage crisis reached almost US $ 1 trillion (Investor Daily, 9 April 2008). This figure is very fantastic, but if it refers to projections the current calculation is that the figure is quite realistic, so causing panic in the world financial sector.

      The crisis that is intensifying is the culprit originating from mistakes count bankers in the United States and some bankers from other countries too expansionist uncontrollable in pouring credit to property sector, especially less productive housing loans. This problem housing market began to decline in 2006, due to rising interest rates to highest figure of 5.25 percent. This increase in interest rates causes repayment home loans are more expensive, triggering delinquency in large payments, and become a threat of bad credit.

      According to George Soros, the current financial crisis is the worst since major depression lasted 

1929, and this crisis led to the nadir (lowest). Root this financial crisis has been embedded since the 

1980s, at that time the president Ronald Reagen and Prime Minister Margaret Thatcher want laissez 

faire, a school that supports a liberal market that will correct itself for mistakes

(Bloomberg News, April 3, 2008). Free market economic policies are accompanied loans

accumulated accumulated to date. Ben S. Bernanke (Governor of the Bank Central / The Federal 

Reserve) of the United States at the end of 2007 warning that the US economy will slow down 

before the end of the year 2008, due to the housing credit crisis which made it difficult for 

the financial sector. According to the IMF Current turbulence reflects fragility of the balance sheet

 and weak capital.