Rising Costs, Inflation, Recession

A perfect economic storm is rapidly unfolding that includes: (1) a crisis in the banking and housing industries, (2) a dramatic drop in stock market values, and (3) serious devaluation of the U.S. currency. Underlying much of this are rising energy costs, which affects the cost of everything, including the cost to heat homes, the production of food, and basic transportation). This, in turn, will drive up inflation significantly. Combined, this will create strong recessionary pressures that will reduce the purchasing power of individuals and governments. In the past, the U.S. economy was such a major driver that it affected the rest of the world’s economies. However, the effect this time is far less great because of the growing economic power (not only as an exporter but also as a consumer) of the European Union in the developed world, but especially because of massively growing economies in countries such as China, India, and Brazil. This will mean that our increasing economic weakness could well enable other countries to leapfrog past the U.S. in some key industries – including our areas of the most recent strength: technology and service industries.

This page is part of the Environmental Scan, one of NELINET's Planning, Assessment & Accreditation Initiatives.