In an article in ‘reuters’, Investment Analyst Elvis Picardo compares U.S situation currently to that of Japan’s during 1980. According to picardo in the 80’s Japan was caught in the vicious circle of real estate and debt crisis, the mistake was lack of transperancy, delay in the measures by the Central Bank etc. But in case of U.S the situation is different and I couldnt agree with him more. Every effort is taken to make sure that the crisis is arrested, there is absolute transperancy in fact about $200 billion has been declared as mortgage related write downs in the U.S, Fed has been giving rate cuts to boost the confidence of the people and to increase the investment level.
In conclusion the debt trap might be identical but the U.S economy has been handling the crisis in such a way that it is arrested and situation is being reversed and it is quite soon that we would see the morale of investors surging and the economy on an upward swing. This is quite vital as the same would affect the global economy too.