Recession Returns ??

Second Recession: why is it imminent?
Factors indicating to recession
1) Growth rate of Germany:- 0.1%
2) France virtually no growth last quarter
3) Euro Zone as a whole -0.2%
4) Steep fall in the stock exchange across the world.

Reasons behind the Recession
1)Slow growth in the economy of the developed countries .This, in turn, affected the growth of the countries depending on export like Germany, and is a threat to growth of countries like China, India etc. The growth of developing countries, which negates this stagnation, is marred by alarming increase in the inflation. So, government here is forced to contract spending and increase interest rate, which can further lead to impediment of economic growth in these countries. These entire factor, led to dip in confidence and volatility in finance market.
2)Due to bail out packages rolled by the various governments to counter recession, the global debt of the world increased substantially. Although ,for world as whole it is still 69 % of the total GDP , for individual countries like Greece and Italy it is as high as 151 and 101 % , respectively. Earlier, market believed that other countries from EU will help these countries in bailing out from financial crisis. Now, when it is clear that UK, France, Germany all are plagued by a certain degree of economic crisis. So, the bailout package provided by the EU will be limited. Hence, the bond price fell and interest on them increased. Also the crisis originating from Greece is not contained there, but is extending itself to entire EU. Italy, Portugal, Spain and to some extent France is already facing the music
3)The above factor made serious dent in belief that the Treasury bond is a safe haven. Sovereign default now appears plausible. This has led to increase in interest rate paid by government to the bank in lieu of borrowing, even in the countries where net debt to GDP ratio is relatively not that high.
4)In the USA, public debt has increased considerably, due to stimulus package rolled out to counter the recession. To reduce this debt, government could either increase tax or withdraw the package. Sadly, it chose later leading to contraction in public expenditure rather than expansion. It not only slowed down economic growth, but also led to rejection of public expenditure as tool to counter recession .The same tool which was used to counter economic downturn since the Great Depression of 1929.
If we combine all these factors we reach to a conclusion that a second wave of global downturn is a certain possibility. In fact signal of the same has already stated to come. What makes this global downturn more sinister is that there is no mean at least in sight, at present that may stall this recession. So, this recession will last longer than the previous one because the financial weapon which was used to rein the first one has now been abjured by various nations in the world.