wait for US elections to conclude and then One of the most...

wait for US elections to conclude and then One of the most important upcoming economic and investment issues is how the US government deals with its impending fiscal crisis at the end of 2012.

The US fiscal authorities are facing two major problems. Firstly, the expiration of numerous tax benefits at the end of 2012. Secondly, the automatic cut-back of government spending (sequestration) in terms of the failed debt ceiling agreement. If handled badly, these issues have the potential to push the US economy back into recession during 2013.

In February 2012, Chairman Ben Bernanke referred to the upcoming fiscal dilemma as the “fiscal cliff”. This phrase is likely to be repeated often over the coming months.