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2008 may destroy USA’s economy

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    New Year 2008 may destroy USA s struggling economy Pravda.Ru A forecast made by Denmark-based Saxo Bank, chaos will take a grip on the world in 2008. Oil
    Message 1 of 1 , Jan 10, 2008
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      New Year 2008 may destroy USA's struggling economy

      A forecast made by Denmark-based Saxo Bank, chaos will take a grip on
      the world in 2008. Oil prices will skyrocket to 175 dollars per
      barrel, the Chinese market will collapse by 40 percent, whereas the
      U.S. will suffer a 25-percent setback. All this will happen because of
      the mortgage crisis in the USA which already slows down the U.S. economy.

      High oil prices can bring only good to Russia, though. On the other
      hand, even if the above-mentioned forecast comes true, Russia will
      face serious problems in its economy too. It is worthy of note that
      the majority of Saxo Bank's previous forecasts for 2007 have proved to
      be true to fact.

      On New Year's Eve most people recollect the outgoing year and hope for
      the best. However, Saxo Bank experts seem to be an exception from this
      nice tradition. David Karsbol, the head of market strategy for the
      bank, said that the forecast had not been made to intimidate people.
      "It gives a reason to think about the future of the market," he said.

      Saxo Bank experts believe that oil prices will hit the level of 175
      dollars per barrel in 2008, whereas grain prices will double. The U.S.
      and the Chinese markets will collapse by 25 and 40 percent
      respectively by the end of the summer of 2008. Every third of ten U.S.
      large building companies will go bankrupt. The British economy will
      also start declining.

      The bank has its forecast on the new U.S. president too. The bank
      predicts that Ron Paul, the Texan Republican, will take the office in

      On the other hand, if the U.S. economy slows downs its development as
      predicted, it would mean the decrease of the oil consumption and the
      oil price.

      Oil prices much depend on the political constituent. If the USA
      launches a military action against Iran, oil prices will most likely
      jump up to 250 dollars per barrel according to a recent forecast by
      Standard & Poor's.

      The dark forecast from Saxo Bank does not mention Russia. There was no
      report issued in 2007 outlining apocalyptic perspectives for the
      Russian economy. The ongoing economic rise and the stable ruble
      protect Russia from financial shocks.

      Most likely, Russia's economy will not be subjected to considerable
      changes or fluctuations during the forthcoming year either.
      Nevertheless, Russia is a part of the global financial system, which
      means that the country will obviously suffer from a possible economic
      collapse that may occur in another part of the world.

      Russian specialists say, though, that the nation's economy will
      continue to endure unpleasant surprises due to the growing inflation
      rate. They say that prices in Russia will grow by ten percent in 2008
      against seven percent as predicted by governmental officials.

      The Conference Board, an international organization that provides
      trusted insights for businesses worldwide, said that its index of
      leading indicators reflecting the state of the U.S. economy reduced by
      0.4 percent in November and reached the minimum level since July of
      2005. Seven of ten indicators (stock prices, the index of consumer
      expectations, etc) show that the economic setback may begin already in
      the spring of 2008.

      The U.S. Treasury put forward an initiative to reduce the income tax
      against the background of the credit crisis. The U.S. economy will
      only gain profit from it because the nation experiences difficulties
      of cooperation with other countries which use less burdensome tax
      systems. U.S. Treasury Secretary Henry Paulson stated that it could be
      possible to replace the income tax with the entrepreneur tax which
      would be similar to the currently used value added tax (VAT).

      U.S. President George W. Bush has not lost his optimism about his
      nation's economy despite the gloomy forecasts. The U.S. sub-prime
      mortgage crisis of 2007 may be replaced by the credit card crisis in
      2008, as Americans have been falling behind in paying their bills,
      with credit defaults climbing by double digits. The value of U.S.
      credit card accounts that were 30 days overdue rose 26 per cent in
      October to $17 billion.

      Companies like GE Money Bank and HSBC said they've seen a 50 per cent
      increase in accounts that were 90 days past due. Experts said that
      could lead to more problems for an already struggling economy.

      Translated by Dmitry Sudakov



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