Penicillin for an economy in recession.

The dollar is falling, its might being challenged more so probably in the factories of China and the large swathe of Babus (software kind) that are produced in mediocre Indian universities than the deserts of Iraq or the rugged mountains of Afghanistan.

The Sub prime Crisis along with the high Oil prices makes economists give speculative theories of another depression. Well I think its bad, for everyone, depression is after all a dark word right, but I think its positive in some aspects.

First of all I do not believe it will in anyway be acute depression, simply because of the globalized nature of the economy, I mean can china afford the dollar to slip to levels where its export oriented economy would lose jobs? Can India allow the dollar to fall so much that its much touted rise of middle class in recent times goes burst and there happens a rise in communist literature seeking dreamy utopian welfare state? For me these are worst scenarios of a falling dollar, we need to keep India and China going for the sake of 40% world to be happier ;)

There is another side to the story though, what if Arab countries stop trading Oil in dollars? This is a perfect recipe for breaking the back of the dollar further. Let’s keep the discussion on Iran, Israel and Inventories for another blog.

In spite of the relatively negative background with which I started, I think the USA can take some positives out of this imminent depression, in my opinion, this economic depression, military fatalities, political turmoil is in some ways positive for USA and I believe its more of a penicillin for this country. USA did not become first world in a day right? It surely is first world due to large sacrifices by a large number of people who worked hard to make the American dream come true and build this great country. But after two years in this country I think it does need a vaccine, a small shock you can say, which would reignite its people the same fervor which made it first world.

This country has the immunity to take this problem of depression or recession as they call it in the right way, it has great Universities, but it needs to improve its schools may be, unlike India which has great schooling system, prepares you well for the university, but the university system fails its cadre in India, its below par, not funded enough and too much strangulated by the state. USA has great universities, but it constantly needs students from other countries to keep maintain its technological might; else what were H1 visas and green cards for??

Another good comparison would be telecom, in a so called 3rd world country like India you could call anywhere within the country for a minute for approximately 3 cents and pray how much does a call cost in USA which is a first world country? I think Indian telecom companies are doing healthy and the service isn’t bad either!!
The USA in short needed a small shock to wake it up form its current sleep of content and make it compete again with the rest of the world to be the most powerful, biggest and democratic country.