Tough Economic Times For The Global Stock Market
It's been a difficult year for economics all over the world. With the tumble of the United States economy, in large part due to the absolute plummet of America-based stock markets, including the NASDAQ, a ripple effect was set into motion that reached further than many analysts could have predicted. While many talking heads experts recommended that it wasn't a time to sell back in October of 2008, as the picture became clearer, many financial gurus were left scratching their heads in confusion.
No one has been more confused about recent events in the global economy than the numerous consumers in various countries. It truly came as a surprise to people all over the world when global markets started tanking in October of 2008, mostly because after other near-misses in the global economy, it's mystifying to think that something could go on for so long and end so poorly.
The world stock market's value has been estimated at close to seven hundred trillion dollars, with the role of the United States economy in that market significant, at around forty trillion dollars. However, the last year or so has been a see-saw ride of recovery, with times looking up and times looking extremely dismal. Entire countries have been bankrupted through the cause and effect of foreign investments. Famously, the entire country of Iceland, a small island nation with only two or three national banks, managed to lose the entire country's savings just because of the faltering power of the dollar and the Euro in unison.
International industry is a major component in how the financial troubles of one major industrialized nation could impact so many others. Many business are now international, especially corporations with a great deal of power and market shares. To do business well in the 21st century is to understand it as an international enterprise, and since investments are tied into a world scale, it's no wonder that stock markets crashing can have such an epic and global effect.
It's not just the economy, either. Many investment companies have recommended branching out from one's home country and trying various markets around the world. When the American dollar is the base of so many financial interactions and it starts to slip, it takes a whole lot of value and wealth along with it.
While there are entities in check who are supposed to be keeping track of the conditions of various world markets, recent events show that sometimes those watchers clearly need to be watched, too. Especially after the near-gloomy crash of the late 1980s, when America vowed to put aside a path of excess and tone things down a bit, it's shocking to see just 20 years later another difficult financial circumstance to navigate. Only this time, the rest of the world economy's come with it.
This mess further spread to the markets, with the price of stocks tanking as people tried to get out while they still could. In the United States and in many European countries, digging the country's banks out of this mess meant federal dollars going towards non-government institution's financial recovery, with hopes of reinvigorating local economies and eventually, picking the international economy back up.
Understanding the global stock market is difficult for regular people, especially in such difficult economic times, but it's always helpful to keep one fact in mind when trying to keep up with the financial news on television and the radio, as well as in the newspaper: the recent occurrences were baffling trained watchers and economists, so whatever doublespeak or deception is currently in place, it was designed not just for regular people to miss, but for highly trained professionals.
by: Damian Papworth