Alan Greenspan, the former Federal Reserve chairman expressed his opinions in an interview with the BBC that there was the risk factor of the financial slump in America which would occur due to the risk of credit crisis in American market but he also predicted that there would be a less than 50 percent possibility of economic recession. He also stated that over-inflated asset market like the housing market of myriad developed countries would flourish in case they were allowed to make steady progression. Greenspan opined that the emergence of the credit crunch in America would strengthen the possibility of low inflation and low interest ratings.

In this connection, it is also amply explicit that overseas and foreign investors occupy over $4.4 trillion in US debt in the shape of bonds and securities. In case they sell at least 25 percent of that total sum, then the US would certainly feel the adverse impact of hyper-inflation. The foreigners are very much enthusiastic to purchase Treasuries and equities which would enhance gobbling up huge $800 billion existing account deficit of America and this would certainly increase the possibility of demand for keeping the dollar artificially high. However, just like the sub-prime mortgage owner whose teaser rate has abruptly ended, America at present faces the brunt of severe adjustment of higher payments with the possibility of discretionary income to enhance the indulgence.

The wrong initiatives taken by the then Bush Administrative machinery to generate $3 trillion unnecessary expenditure encouraged national debt within six years. This type of drastic measures taken by Bush administration produced the severe impact on the credit crisis in America. American financial sector divulged fresh symbols of depression and distress due to the palpability of the credit crisis which afflicted international financial market since the great depression of 1930.