DianaTan.net

The inconvenient truth in financial markets today is that the US is already in recession. The turmoil in the credit and housing markets is prominent. Compounding this is the fact that borrowers are the furthest behind on their debt payments in 15 years. Asset prices soar, borrowing increases and the capital inflow grows. Finally, the bubble bursts, capital floods out and the banking system, burdened with mountains of bad debts, implodes.

The total number of job losses in the first 3 months of this year is 232,000 while unemployment rose to 5.1%. Job cuts were concentrated in the manufacturing, employment services and the construction industry but the damage is becoming more wide spread. US commercial banks alone are forecast to cut about 200,000 jobs over the next 12-18 months. US unemployment rate could potentially balloon to 8% in 2009.

Today’s credit crisis is far more than a symptom of a defective US financial system. It is a symptom of unbalanced global economy. This means that as more Americans become jobless, there will be stiffer competition for freelancer jobs with many trying to earn something from the internet for very low bids.