Recession has certainly taken a toll on a number of issues may it be business, technology or personal issues. Considering the aftermath of the global meltdown and its far reaching impact into our future, bad credit whiz have sorted out four issues the recession will call for a change in our world of existence and support.

Four Ways This Recession Has Changed Our World

While several issues line up the list of changes called for, the following four seem to have a far reaching impact.

• Dropping Birth Rates – The rate of population growth should be maintained at a minimum of 2 births per woman, to maintain minimum population growth, but given that, it does not meet the requirement, the replacement rate of population is expected to stay below 1, which means the population will diminish. With increasing cost of living, raising a child is expensive than ever before. No wonder, why parents go for not more than 1 kid.

• Lowering Demand for Houses – Bigger houses have literally become out of fashion. Or should I say, maintaining larger houses invites loads of expenditure and hence people prefer smaller apartment complexes. The trend makes it clear that people are moving towards what is called the joint family system or more preferably called multiple generation houses. While the said trend is prevalent in Indian, Hispanic and Asian families, it is catching very fast in the western countries too. It has multiple advantages. First and foremost is the cost benefit involved in more number of people living in bigger houses, which means the cost is shared among more number of people. Secondly, the same house is used across generations, which means lesser number of houses for the later generations too and thirdly, all members of the family living together reduces the need for day care services, as the family members at home help in taking care of the children, eventually reducing the expenses. Above is not only true in case of buying houses, it holds good even when the houses are rented.
• No to High Cost Colleges – What do you think is the reason behind high cost colleges? Well, it is free availability of student loans and a finance that has enable colleges to increase the cost of education, making it eventually more expensive. While in the early 60’s a family had to save 57 days earnings to pay the annual college fees, in the current decade the number has increased to 195 days.The best thing to do is to reduce the cost of education by opting for community colleges and avoiding high cost colleges. Well, once the trend continues, all high cost colleges will be required to reduce their fees in order to attract more and more students. Until it happens, stay in low cost colleges and then apply for a shift to these colleges. It is here that online colleges will find a favorable position in view of those students, who are looking for low cost and best curriculum courses.
• Retail Shopping a matter of past – With more and more web based shoppers advantages experienced by consumers that help them get rid of the difficulties like commuting to the store for purchasing your groceries. It is also the case with mega stores or the so called all in one store. With growing number of large sized mega stores, retail shops are left to face a big blow in terms of business and demand. With growing technology and changing attitude of people, the retail market never seems to resume. Of course these stores and shopping may not have what is called the human touch, well it is not far off when you will have a dedicated personal assistant who will help you complete your online shopping without hassles.

So what is that you have to say about how recession has changed our outlook?

The collapse of the real estate market has been one of the major highlights of this current recession. Homeowners and investors have seen the value homes fall through the floor. This has also been coupled with unprecedented high levels of foreclosures and weak consumer confidence. Analysts trying to place a dollar figure on the amount of losses have all agreed the financial losses nationwide could be in excess of $600 billion and counting. Although recognized as the genesis of the financial meltdown, subprime mortgagers are still bent on slapping on high adjustable interest rates on subprime borrowers who had purchased homes under the no down payment home purchase system.

Expanding Crisis

After the second quarter of 2009, we saw a new trend developing in the real estate market where the fangs of the recession started biting into the untouched territory of high end, second home and vacation home markets. These homes usually valued over a million dollars and were reserved for the rich were standing still without suitors. Locations such as Florida, California, Michigan and Nevada where there is usually a waiting list with real estate agents to purchase high-end houses were all showing increased rates of foreclosures and late mortgage payments even among the rich. This has led to many in the real estate business to concede that by the time this recession is over no one will be spared.

Lack of Confidence

Prior to the collapse of the housing market in the US, investment in subprime investments was hot commodity amongst traders. These subprime loans were being packaged and resold with A+ rating providing high returns for investors. When interest rates began to rise and the pressure was brought to bear on the subprime home owners, the bottom of the bucket fell out, investment houses began operating as “ponzy” schemes by taking the investments of smaller investors to pay the larger ones. This however was unsustainable and the entire system crashed. As a result, over 2.5 trillion dollars was eventually lost in the confusion that followed. Investors started selling blocks of bond at prices significantly less that market price as the bonds were downgraded from A+ to junk.
To prevent a total collapse of the mortgage bond market, the government had to provide financial support to the major players Fannie May and Freddie Mac.

Loss of Jobs

The real estate was one on the major employers of skilled laborers. These laborers ranged from carpenter, plumbers, electricians and engineers. The collapse of the real estate market literally put these individuals out of jobs as there was a cessation in new housing developments and current homeowners chose to suspend all home improvement until the financial condition improved.

New Opportunities

It is said that in everything there is opportunity. Some individuals have managed to benefit tremendously out of the collapse of the real estate market. Some individuals preferred to invest in modest investments that were unaffected in the recession. As a result, they were there to buy up many potentially valuable real estate properties at a small percentage of the original market value. These individuals stand to make significant profit when the market resurges. Other investors such as those in the home rental sector were also able to acquire property at knock down prices.

Changes because of the Recession

The recession has led to many individuals and government to rethink their economic strategies to drag themselves out and prevent falling back into recession. Some of these changes include:


1. Currency Changes: The days of the rule of the US dollar are over. Since the advent of the latest recession, we have witnessed the value of the US dollar falling against other major world currencies. In addition, many investors are shifting their investments from US dollars to gold as they now see gold as a more secure format of hording their money. This has also triggered a rise in the price of gold thus reaping huge profits for early bird investors.


2. Consumer changes: The world of China manufactures and the US consumes is now confined to the history books. The credit downfall in the US and subsequently in other major commercial markets resulted in US consumers tightening their belts and literally brought the consumer driven market to a standstill. As a result, manufacturing countries such as China have to turn to their own population by implemental fiscal policies that promote local spending. Thanks to their large population, China’s economy with still growing while other countries broke under the burden of the recession.


3. Fiscal Policy Changes: The recession have ushered a wave of fiscal changes. To counter the effects of the recession each country has had to formulate their own strategy based on their financial capacity. In the US, we have seen extensive government spending to boost employment, the implementation stringent rules on bonus packages for top executives of financial institutions and the lowering of interest rates to boost borrowing.
Japan is battling a problem of deflation where prices keep dropping due a rise in the value of the yen against the US dollar. As a result, they are implementing policies that will add some controlled inflation to their financial system.

Other countries such as Iceland have had to resort to borrowing from the IMF to sure up their finances as all their national reserves dried up because of the recession.


4. Political Landscape: Prior to the recession, the world was in a one-poled mode where all events were dictated by the United States. However, the crippling recession has brought the US to its knees to an extent where they have had to resort to getting financial assistance from countries such as China. This has significantly rescinded their political clout as they are now unable to pressure these countries to conform to their wishes as before.