The vicious stock markets crash in conjunction with of looming economic crisis has left investors in tantrum, more precisely’ left average middle class individuals in agony. No matter anyone holding direct or indirect stake in capital markets, as indirectly markets wiped out trillions from retirement accounts. Investors just have enough troubled financial stories, as they only want to put the stock markets on the back burner. Many individuals including investors and traders have their investments evaporated without trace. Further investors lacking their trust on opinions or predictions of the different experts and even on government statements and economic data provided.Now with the beginning of New Year and finally President Obama inauguration as New United States president, what will be coming months bring? As many investors seek.
I personally exercise caution. While many investors suffered from huge losses and waiting to cover up from markets revival will probably face disappointed in the near term. No one knows how long does it take, no analyst or no expert precisely predict and define the duration of recovery. Even the Government is also staying away from commenting on the recovery in economic situation in near future, the first priority is the stabilization and even that may be the tough call. The massive stimulus bills only provide a short-term support to the economy. The medium to long-term outlook is quite bleak.
Financial system of the country considered as the core of economic system, same way capital market considered as the core of financial system. Now if you consider upward down approach, the situation of the economy still remain uncertain, so does other elements. The unemployment figures keep on rising and passed much above the danger zone, remember the figures can be easily manipulated!
Fed has been accumulating whole lots of mortgage based toxic debt while supporting the liquidity supply with trillion of dollars. How much the fed actually provide and still providing will surpass wildest assumptions. With tougher Credit availability trade is suffering the most, export as well as import figures start going downward with almost null growth in the economy.
Fed chairman Ben Bernanke recently said that quick economic rebound is not on the cards, though he fairly agreed by pointing out that people in different countries are logically concerned about government aggressive supply of money into the financial system while deliberately turned away from the problems of other sectors, he keep consistent view of support efforts, mentioned as unpleasant but necessary.
Many analysts have warned that the Federal Reserve over heated efforts may end up fueling inflation. From what it may seem, well known to the individual of the Chairman Bernanke caliber, as he referred to concerns by mentioning that the Federal Reserve actions will fan inflation by effectively printing more money, but he also mentioned that risks of inflation remain low in the near term once the credit markets begin to recover the Fed will have to unwind its lending programs.
Well, I am certainly not the fire starter or the one who run around like my head is on fire telling everyone that situation get far out of the hand for investors. But I will tell readers that, in the recent stillness around the present markets, one must not make the same mistake that left you the victim with burned fingers due to markets severity, any move to recover money from the capital markets right now could be the investors worst mistake, if not last before bankruptcy.
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