Eight Projected Economic Trends of 2009

The year 2009 is a transition year for many of us, a year of transition from a “bubble” economy, to creating a more stable, and sustainable economy. What will the Eight main characteristics of this economy be?

1. Investment through Big Government

Traditional Investment from private institutions has mainly ended. The main investor into our economies will be a bigger Government, in the form of loans, grants and boosting recently bailed out or Nationalized Industries.

2. Lower Taxes and Spend Policies

Our previous “bubble economy” has failed. This means Governments need another way to boost the incomes in our pockets, to get us to spend. Lower direct income taxes, tax breaks and even tax holidays will be the new way to release any spare cash in our pockets to enable us to spend.

3. Lower priced Consumer Goods

Exporters will lower prices for their products, and deliberately cut profit margins in order to encourage the sale of these products. They could work on the philosophy any business is better than no business, therefore offering products at a much cheaper price. Flooding markets open to these products, whilst offering more basic models of previous products at lower prices.

4. Cost Cutting

In order to restructure businesses that are currently being over-stretched, Governments and businesses will cut costs. Either by cutting back on staff, and salaries, selling toxic assets at a bargain or closing sectors of their Companies.

5. Unemployment

The “bubble economy” has ended, and restructuring has began. This will lead to huge rises in unemployment in from traditional manufacturing, banking and financial service companies, service companies and some commodity based industries.

6. Deflation

Lower prices, less money and more unemployment will cause deflation. Those with work, and cash will benefit. Others with debts will find themselves owing more than their assets are worth. Cars, Electronics and Property prices should drop, whilst the Hospitality Industry will offer bargain vacations.

7. Scientific Development

Technology and Scientific research should benefit from this new economy. The benefits will particularly be felt by “Green” energy Companies that should get funding from the Government. Other technologies could grow, like low cost space research, and biotechnology.

8. Lawsuits

Too much money has been lost, too many people have felt they have been deceived. Governments traditionally have been reluctant to prosecute financial criminals. Private lawsuits, could boom, as our Governments react too slowly to investigating financial fraud and deception.

Some of these trends are negative, but as our old economy turns into a new sustainable economy, the negative effects of the collapse of the old will naturally decline. Leading to a very new, and diverse Global economy, that was born out of the ruins of the old.