July 16, 2008

When recession can easily turn into depression

Over the years we have seen recessions come and go, certainly they are frightening for some people and by the time that it ends, there are many victims. But how far does a recession have to go before it becomes a depression?

Fortunately there has only been one depression in recent times, but it lasted for ten years and by the end of that the business and real world were very different places.

It seems that bad news is becoming a regular occurrence from the other side of the Atlantic Ocean, starting with the sub prime mortgage problems and now increasing inflation. But all of these events are not confined to the US the problem ripples out around the globe like a stone thrown into a still pool of water.

We were supposed to have triggers in place that prevented such financial disasters, but these appear to have failed, the problem is are we in free fall or will the emergency parachute open just in the nick of time to save us all?

Source [Times]