By: Mike Campbell
It is easy to lose sight of the human cost of the economic recession; down-turn – call it what you will. America is the world’s most affluent country and nowhere is much more glamorous or glitzy than the play-ground city of Las Vegas that springs up like a magic castle in the Nevada desert. Today, the city has become the home repossession capital of the USA; unemployment is above the national average at 13.1%; the value of homes has fallen by a third in the last year and has more than halved since the property peak in 2006. It is easy to understand the root causes of their plight: the city revolves around the gambling, leisure and conference business – all areas to be hit hard in a global recession. Perhaps when Las Vegas “turns the corner” we can be sure that the down-turn has really been relegated to history.
Joseph Stiglitz, a Nobel laureate for economics, has warned that the recession may hold a surprise or two in store for us yet. The former Chief Economist at the World Bank cautioned that it might be a “double dip” recession with another down-turn following a short period of growth. According to Stiglitz, a sustained recovery in US consumption was yet to materialise. He credited the “recovery” as being due to the effects of the government stimulus package and pointed out that it could not continue indefinitely. Withdrawal of the measures in 2011 “will be a negative shock to the economy”, he warned.
The Dollar has strengthened a little against the Yen, closing yesterday at 93.04. Against the Euro and Sterling, the Greenback closed down a little at 1.433 and 1.6405 respectively. The Euro was stronger against all three currencies closing at 1.148€ to the UK Pound.