December 11, 2008

HOW MUCH SLOW THE ECONOMIC SLOW DOWN IS ?


Now a days we all are well aware of the current economic slow down , what the slow down is ? why it is and how much slow it is ? Let's try to understand it.

         In a very simple term economic slow down means the pace with which economy was growing has reduced or might be the pace is negative. The main indicators  of such situation is bankruptcy of financial institutions like banks or money lending companies. Banks are the backbone for the economic growth of any country as they are the one who provides liquidity in the market. Due to instability of banks, liquidity has tightened and flow of money has stopped in other words money has been blocked which has created the credit crunch and this is the main reason why even big companies are finding it difficult to raise the funds.

        Virtual money which in fact never existed has suddenly disappeared which is one of the main reasons why the slow down is getting more and more severe with the time. Many big corporate honcho's property is almost reduced by half while the fact is the that they have not lost any physical assets. Well viewing from this angel it seems that nobody has lost anything the slow down is all about rapid change of one's mental status.

       Job cuts is one of the main indicator of slow down or recession. One of the reasons of these job cuts is an uncontrolled growth of all the sectors especially service sector. This resulted in an uncontrolled recruitement by big companies which is now unbearable for them.

       Let's get agreed at the point that except loss of control on the growth this recession or slow down is more of the moral loss rather than materialistic loss and will get slow very soon.

        

         

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