TODAY;S ECONOMY is experiencing unprecedented problems and the threat of the recession is the only problems affecting the world economy. Many of the economic problems faced by the world were largely avoidable and were the result of economic mismanagement at various levels.It has become an eye openers for the future .

The Fundamental Problems of world Economy are listed below:-
National Debt of all the countries in the world
Current Account Deficit and the fall of GDP(the growth rate)
Deficit of Housing investment Market( real estate )
Rise in Inequality in the economic world
Devaluing of currency
Record Debt Levels on which Past growth has been financed by consumer borrowing and the Credit Crunch . The Loss of confidence of the public in banking system due to bad loans .The banks themselves stand responsible for this ,they started giving off free credit cards to the consumers without taking special care as to where that customer stands at its financial status and then latter cried over the split milk to try and recover the spent money ,people were at the liberty to use the cards and then keep on paying the minimum amounts to keep the cards running.Gradually the period of exhaustion came the the results came as a worst product to the multiplying theory of the banks.

The Boom and Bust of the house prices :--
The Housing Market in general is a good example of an avoidable asset price boom and then ultimately bust. Various factors allowed real estate to rise much faster than it was generally required basically it was all overvalued. As house prices fell to correct the imbalance,now there will be a marked slowdown in consumer spending for the real estate. they will think twice before they spend on such investments .
No regulation of Sub prime mortgages:--mortgage industry was irresponsible, but, the government are also to be blamed for allowing irresponsible practices to occur. To Simply define, the mortgage industry was able to sell mortgages with casual disregard for whether they could be paid back. This could be a simple recipe for future mortgage defaults and affect the financial condition of the banks
The interest rates were reduced to stimulate growth, getting money with interest rates so low, people felt that mortgages have become affordable and they started taking advantage of it .That was a wrong presumption that they would not increase.
The fundamental problem was/is that the government have shown little concern for effectively reducing relative poverty. It has been low on the agenda of the government of different countries and the national debate in various countries has tended to ignore this problem, inequality in the world economy has increased.it has become one sided drop of balancing tool.In real terms the minimum wage has failed to keep up with growth . The National debt suffers more when the governments liabilities to pay pensions are included and the aging population places higher demand on their health care and pensions, and pays less tax. The excessive spending on military build up was another reason why countries faced the downfall.
The problem is that, now the world economy faces a real recession,leaving a little scope for expansionary fiscal policy,the deficit will worsen more as because of the stage of the economic cycle.To bring an up lift in the economy the government should either levey higher taxes and promote lower spending, or it will put more pressure on interest rates crowding out private sector spending.

In an era of capital(money) mobility a present deficit is easier to finance. But, if this goes on for a prolonged period of time,eventually, one will faces problems in attracting the required capital flows. Because investors in general are becoming more cautious over the prospects in this global deficit, capital flows are slowing down contributing to the devaluing of capital gain. The present deficit reflects that there is a fundamental imbalance between consumption and domestic production and could always act as a constraint on future growth globally .

Its time to wake up and do not let thing go as they are today just banging the campbells won't work we have to rise again after every night there is a new day to come let that come now .Isn't it like the rain cycle where evaporation takes place and then comes the wonderful shower of rain ,so lets buck up and let evaporation of recession change into a blessing of rain .