The recent financial crisis which hit the world markets showed that no man is an island onto himself. In our world today where everything is interconnected, a recession or crisis in the US or Europe will inevitably have effects on our local economies.
This great diagram and article from CNN is excellent in explaining the interlinkages and effect the recent Lehman Brothers collapse and AIG bailout has on the man on the street.
IFLC is an aircraft leasing company which is also one of the biggest buyers of planes worldwide. Cutbacks from IFLC may inevitably hurt the already troubled Boeing and Airbus who may have no choice but to cut jobs.
These seem so huge and far away that several might be asking how we can be affected by it. Unfortunately, as the world is now a global village, any negative effects will be felt throughout the world.
The financial distress these aircraft companies face may result in higher airfares as they struggle to cut their losses. Couple this with high fuel surcharges and zero fares will indeed be something of the past! Jobs in the airline and tourist industry will feel the pinch as people cut down on travel. High unemployment rates may lead to less spending, less money flowing in the economy and an overall depressed state of the economy.
Perhaps travel will once again become a thing of luxury as more important things fight for priority for our limited cash which is fast being depleted by inflation.
Although it all seems to be doom and gloom, do remember that the economy tends to move in a cyclical fashion. From this crisis, the strongest will survive and emerge even stronger to once again build a good economy.
