Welcome to Articles@Peuan
The Credit Crunch and how it affecting your Country?
View PDF | Print View
by: Dave Saltonstall
Total views: 30
Word Count: 412
In the United States when we first decided on the bailout we were told that the best way to get the money out so people could use it was to give that money to the banks. The reason for this was because the government said that it needed a vehicle for TARP money to trickle down to individuals. That was a bold faced lie. We have had a vehicle to trickle money down to individuals how about the economic stimulus packages that we have received three of that was a vehicle. Now we are talking about credit and we are using more credit to pay off bad credit is this familiar with bad credit swaps. Just exactly what were these failed banking institutions doing?
So it is putting good money after bad and there really is no need what it is doing is prolonging the inevitable collapse. Modern economics teaches us that relevant vibrant institutions will succeed if the model is not correct or sustainable then it will collapse that’s what is happening now. We need to let the system implode but what can we do to ensure that good people are not affected? With the housing industry because the banking models for lending have not worked and are dysfunctional we should tell them they have to declare bankruptcy but we should tell those banks to forgive those loans. We keep loaning or just giving away TARP money again putting good money after bad money loaned money to pay for a loan.
Any first year business student would say that is not a good idea that you should never start your business in a deficit nor let it go into a deficit.
When we look at good companies to invest in do we invest in companies without capital or companies with 100% capital returns from the previous year? The same thing will be true for our debt and our debt-consolidation options. Gradually people will lose their faith in the dollar it will depreciate more and other countries with a better more relevant model will take over because we will not get our act together with spending and loaning money. Credit is over extended and needs to be cut back this will hurt for a number of years but if it is cut back and real money is used to finance expansion of the markets then this expansion will have a much harder time of contracting in the future.
About the Author
For deeper reading and understandings on the current credit and debt situation in your country, consult the debt-free website, if your interested in seeking financial advise regarding becoming totally debt-free then don't delay, click www.debt-free.org.uk today!
Rating: Not yet rated