Who is in more trouble - Europe, US or Asia?

'Who is in more trouble?', well all 3 are and there are no exceptions and no continent can escape economic recession. It is like a huge chain, downfall of the housing market and dire unemployment in the US directly affected the European and Asian countries. That is why we see governments in all these continents have been coming up with stimulus packages to minimize the problem if not stop it.

According to Nader Naeimi, a Sydney based investment strategist with AMP Capital Investors, said: "These sorts of stimulus measures are steps in the right direction. We need circuit-breakers to unlock the credit logjam." (source: bloomberg.com).

Australia wants to be away from recession as hence the government announced $42 billion Australian Dollars more. But there is still pessimism floating in the market, like one Chief Asian economist at Credit Suisse Private Bank in Singapore, Joseph Tan said:"Stimulus measures will help minimize the downside to some degree in the short term. There’s always that shadow hanging down our heads. Jobs are still being lost, consumption is coming down and economies are falling." (source: bloomberg.com).

Hence, all economies are in trouble and are likely to come to the stage of recession at some point in the future and stimulus plans are going to give relief in the short-term and not long term. There are tough times ahead for all, so be prepared.

Is anything else precious than gold?

Gold is a very good investment is what we hear all the time. But due to the volatility in the markets it is risky to trade with the precious metal on the live markets. It is safer to buy physical gold these days. Lesser demand from countries like India, China and the Middle East has also hampered the demand for the metal in recent days.

Volatile markets give investors the only option of buying physical gold since gold is seen as a hedge against inflation related risk. Some also believe that owning physical gold is a priviledge in times of recession and this was aptly quoted by Michael Pento, chief economist at Delta Global Advisors Inc. in California: "The government can print endless money, but they cannot increase the supply of gold. Anything the government cannot replicate by decree, I want to own.” (source: bloomberg.com).

Hence, at this time, gold is the best bet, but buy gold outright, trading in gold in open market is still very risky. All the best with your gold purchase.

Can the new US President save the country's economy?

When it was time for the Bush administration to step down the whole world was jubilant especially the US citizens on the positive note that the new Presdient, Barack Obama will bring a change to the economic recession. But when we look at the bigger picture, there is more to the problem than what is seen. There are no jobs, people do not want to spend money anymore like before resulting in many businesses closing down, people do not have enough money to pay back their housing loans, many banks are on the verge of closing down, the list can go on.

The Obama administration is trying hard to convince that they can make a difference, example of which was the $825 billion stimulus package for banks being approved by the US House yesterday, There is more to do, like creating jobs so that the unemployed are sucked back into the system and also stabilizing the housing market.

This is a very long process and cannot be achieved in a year or two, it can take upto five years or even more for the economies to come back to normal. I just hope the new administration really makes an effort to resolve this issue unlike the Bush administration.