"The financial and economic crash of 2008, the worst in over 75 years, is a major geopolitical setback for the United States and Europe. Over the medium term, Washington and European governments will have neither the resources nor the economic credibility to play the role in global affairs that they otherwise would have played. These weaknesses will eventually be repaired, but in the interim, they will accelerate trends that are shifting the world's center of gravity away from the United States."
"There are just two broad options: either the federal government steps in to save Ford and GM (Chrysler is probably unsalvageable) or America’s two biggest car firms must seek Chapter 11 bankruptcy protection."
"Consumer surveys that suggest 80-90% of prospective customers would abandon the products of a carmaker (like Ford, Gm etc) that had filed for bankruptcy protection."
"A car is the most expensive purchase many consumers make, and by buying a car they also enter into a long-term contract. Buyers expect their 60,000-mile warranties to be honoured, parts to be kept supplied and their dealers not to have disappeared. Used-car values are also a critical part of the deal. If the firm that made the car has gone bust, it becomes virtually unsellable secondhand."
A decline in general price levels, often caused by a reduction in the supply of money or credit. Deflation can also be brought about by direct contractions in spending, either in the form of reduction in government spending. Deflation has often has the side effect of increasing unemployment in an economy, since the process often leads to a lower level of demand in the economy.
