Dear All!
I am not much of an economist and that why I need some answres. Please can anybody enlighten me as to the cause/causes of the Economic Recession on a global scale?
Like you, I am not an economist either, but I can give it a shot :)
- Is it becuase of Interest Based Banking?
Current bust in lending market is because of interest based financing as people borrowed to buy properties (sometimes additional/investment) on ARM on speculation of value appreciation. ARM rate shot up in last few months (years?) which made affording of houses more and more difficult resulting in more bankruptcies. This resulted real-estate values in a free-fall, banks were unable to recover their money by selling those houses. Banks faced bankruptcies. So yeah, this bust is result of interest-based financing IMO.
- Is it affecting only Capitalistic countries?
I think it would affect countries wherever real-estate financing took place in the above-mentioned fashion.
- Is it also because of Al-Qaida / Terrorism?
I don't think so, but "real estate pricing inflation" has not been "investigated" completely yet :D