Global economy may soon face a new recessionNews | March 14, 2011 at 6:01 am
Since the civil war in Libya broke out the oil prices have been soaring high. This rise in oil prices created ripples of disturbances among the investors in US stock market. To make the situation worse, political tensions in Saudi Arabia has been kindled which is the major oil exporter presently. The bad news for the existing investors is coming in a sequel as the political tension of Saudi has been followed by the massive earthquake in Japan. All these events have created havoc in the global economic world unstable and investors may feel to revise their investment.
The present overturned financial condition across the globe has caused great unrest in the stock market of US. Eminent figures in financial market of US such as Thomas Villalta, a portfolio manager of Jones Villalta Asset Management in Austin, predicts that the present political uproar in Saudi Arabia and the highly devastating natural calamity in Japan will probably be translated to a new recession very soon. Although he predicted a dodgy economic scenario yet he seemed hopeful about the political situation of Saudi Arabia to be not as harmful as predicted.
The upsurge in the oil prices in US has also put additional responsibility on the government to dampen its effect on the economy. The corrective measures by Federal Reserve in this regard will make the investors adjust their strategies accordingly. The US Central bank has presently not shown any intention of raising the interest rate and are planning to keep it as low as nearing to zero.