The situation of the worlds economy, which is quite dire will be affecting all of us for quite some time. The good news for us here in Asia is that there is a fundamental restructuring the world's economy with a shift of wealth and growth from the West to Asia. The bad news is that this shift will be very painful for everyone. There are reasons for this downturn and why it will continue. Under Bill Clinton the Glass-Stegall Act was repealed which made it possible for investment and savings banks to integrate and thus allowed investment bankers to place high risk bets with peoples savings (their homes). This was the cause of the sub prime crisis.
This Glass Stegall Act was passed during the Great Depression for a good reason and under Clinton it was removed. George W Bush certainly did his part to exacerbate economic problems by signing into law 8 trillion in medicare entitlements and fighting a nonsensical war in Iraq. Barak Obama is continuing and expanding on Bush's "monetizing of the problems" (creation of new money) by printing up trillions of dollars in a doomed effort to stimulate the economy. Europe has followed a similar path as America and is also responsible but the US is the big player. When the dollar fails, as countries around the world realize that it is becoming worthless, the US will be unable to sell its debt and the US will experience hyperinflation radically affecting economies worldwide. Already China is selling off its American debt and just last week confirmed what many have suspected that they were significantly augmenting their gold reserves.
Compounding exponentially the world's economic problems is the prospect of a nuclear armed Pakistan. Under the control of the Taliban oil prices would escalate radically and force the west in to another long protracted expensive war which can never really be won. Also you may want to consider the impact of the western baby boomer generation retiring and what this will mean as social services are stretched beyond their limit. You may think that I am some kind of nut for endorsing such a bleak economic forecast but may I cite the following sources:
PAUL VOLKER-former head of the Federal Reserve and current top economic advisor to Obama is warning of forthcoming economic hardship. "I don't remember any time even during the great depression when things went down so fast so uniformly"
THE IMF-The world economy will shrink for the first time in 60 years in 2009.
THE ECONOMIST- The renowned journal has stated that what we are experiencing now is more akin to a depression than recession. A depression being characterized by a bursting asset bubble, a contraction of credit and falling prices.
GERALAD CELANTE-A well noted trend forecaster offers a more apocalyptic vision which
is quite disturbing. In his career he has correctly predicted Black Monday(the stock market crash of 87), the fall of the Soviet Union, The Asian Financial Crisis of 97, and the Subprime crisis last year. Celente has predicted total economic collapse of the American economy by the end of this year.
PETER SCHIFF AND MARC FABER-both well noted economic trend forecasters with proven track records who although do not go quite as far as Celente in their predictions both are calling for a severe long-term economic downturn.
WARREN BUFFET-"the economy has approached close to the worst case scenario
BARAK OBAMA-When selling his economic recovery package has warned of economic catastrophe if nothing was done. The list of highly qualified people who question if the recovery program can possibly work is unfortunately long and distinguished. Obama himself has offered no guarantees.
These are just a few of the noted watchers of the current crisis who are saying that things are going to get a lot worse before they get better and do not subscribe that a recovery will occur by the end of the year but rather that we are at a turning point in history (exclude Obama on that).
How ill this affect us teachers here in Thailand? My bet is many, not all, will find themselves if they are still teaching in Thailand working for a Thai teachers wage at a public school. I doubt too many private institutions will remain. The school will give you room and board and and the equivalent of a few thousand baht a month. I currently work at a language school and am the only full time employee. I a working with the owner to devise a curriculum where one teacher can teach 3 classes simultaneously using the help of Thai assistants. The good jobs will be more competitive as more people will be willing to relocate to far away Thailand in search of a better life. Having been a teacher in America that is why I came here years ago, I suspect many more will be willing to do the same in the future.