Will the US economy face a recession in 2011 again?

Where is the US economy headed?

To be sure, recovery expectations have risen in recent months, mainly thanks to stimulus packages and the government’s proactive stance. But this does not seem to be a long-term solution to the situation as the debt is mounting and will soon pile up like a mountain of worry. Everyone is aware of the situation, but every effort is being made to keep the economy running in the short term.

Is the US debt problem really intense?

It’s really hard to say whether the economy will crash in 2011, but it’s almost certain that if the government continues to spend on temporary relief packages to stimulate the economy, the mounting mountain of debt will lead to the greatest financial disaster mankind has ever witnessed. Today, the US government, businesses across the country, and American consumers are all in the same boat, headed for an iceberg. If you don’t agree with what’s being said here, read on for the hard facts.

Will the real estate market recover in 2011?

Mortgage defaults continue to appear fresh on the market, keeping home prices near record lows. Defaults have been record high and rising since mid-2007. What if house prices don’t show a significant recovery in 2011? Well, many economists are of the opinion that the housing market may not show any signs of improvement until the end of next year. Now, this could result in a second wave of foreclosures, making the cracks much wider and hopes of recovery fading for a long time. Are consumer spending and the employment situation still a threat? Ideally, a recession is a temporary slump in economic activity, but this time it has lasted much longer. This is evident in the employment situation, since the unemployment data does not improve despite so much quantitative and qualitative easing by the monetary authorities. The latest stimulus package has provided support to financial markets as investors believe this money will help create jobs in the system and as an end result consumer spending will rise again. But, so far, things have not worked out as the Fed hoped, and the same could happen again.

Are Americans Broke?

There is no hiding the fact that more and more US citizens are filing for personal bankruptcy. In such scenarios, how can the authorities expect demand to surge again, when people are heavily indebted?
America simply needs jobs, and it needs them at a much faster rate than anticipated. The recent recession, which is now officially over, may have been an indicator of a coming depression in the system, as it was much more than a recession. Now, if we slip back into negative growth, which cannot be ruled out so soon, then economic chaos will spread its wings globally and the world will spend a decade of flat growth.

Investors and traders must be prepared for such short-term financial turmoil. Even saving on brokerage costs, by opting for cheap online discount brokers, can help maximize returns in such uncertain times.