Global markets stand on the precipice of another plunge into the now familiar territory of red and recession, though this time there won’t be the prospect of government stimulus spending to soften the blow.

As Asian markets plummet in resigned anticipation of how Wall Street will open this Monday, we find ourselves once more considering the prospect of global economic crisis- the second round of the much-discussed double dip recession. In a market that seems increasingly detached from economic realities, Standard & Poor’s downgrading of US debt to AA+ will be seized upon as a convincing symbol of economic doom, triggering a sell-off that will surely reverberate around global markets over the next few weeks.

Policy deadlock, tepid economic recovery, and sovereign debt issues in the US, spreading rot in the euro sovereign debt crisis, and rising inflation in China; all of these stand as grim reminders that the Great Recession could well end up a two-step process. Compounding the fear is the fact that government stimulus spending has effectively been eliminated as a policy option in many Western countries due to the fiscal squeeze brought on by previous bouts of post-2008 bailout spending.