What is the best solution to the credit crunch?
I have heard it all get rid of politicians, recapitlise the banks, nationalize the banks and do nothing but has any one any real idea on how to fix the credit crunch? Or were we living way beyond our means and it'll never be fixed because the only way we can return to former prosperity is to live on borrow money
There is no simple one sizes fits all solution unfortunately. Some say that we should do as Thatcher did and let market sort itself out - that however leads to misery for millions as they lose their homes, jobs etc
Others believe in state intervention like the government employing people (like they did post WWII to kick start things) - the premise being that then these families will have extra £££'s to spend at the bakers, butchers etc to stop these businesses also via a domino effect collapsing.
Much of the current problem exists because we enjoyed a debt fuelled boom. My Dad often wondered where all the money came from all of a sudden with every second programme it felt like going on about house prices and buying ones at £220k, £500k etc - in his day he said people just did not have that kind of money. Turns out ofcourse neither did they - it was all on the never never.
Now that banks are desperately trying to rebalance the books (after a few not so clever bankers compounded the situation and turned banking from a previously mundane/safe endevour into one where they thought they had cracked it.. actually just passing the hot potatoes round one another) another problem is liquidity.. a business may need a new JCB but cannot get finance, so JCB start laying people off etc these people then stop spending meaning others too see a down turn in sales and the whole thing snowballs.
Ultimately NO-ONE knows what will happen as there are too many variables, personally my fear is that sterling loses its value and we get hyperinflation like post War Germany - given our national debt, the fact we are no longer manufacturers etc I cannot see how to stop the decline.
We are all to blame really, FSA for not regulating, government for not stopping it, bankers irresponsible, us for being such zealous consumers and getting up to our eyes in it etc
7 Responses to “What is the best solution to the credit crunch?”
There is no simple one sizes fits all solution unfortunately. Some say that we should do as Thatcher did and let market sort itself out - that however leads to misery for millions as they lose their homes, jobs etc
Others believe in state intervention like the government employing people (like they did post WWII to kick start things) - the premise being that then these families will have extra £££'s to spend at the bakers, butchers etc to stop these businesses also via a domino effect collapsing.
Much of the current problem exists because we enjoyed a debt fuelled boom. My Dad often wondered where all the money came from all of a sudden with every second programme it felt like going on about house prices and buying ones at £220k, £500k etc - in his day he said people just did not have that kind of money. Turns out ofcourse neither did they - it was all on the never never.
Now that banks are desperately trying to rebalance the books (after a few not so clever bankers compounded the situation and turned banking from a previously mundane/safe endevour into one where they thought they had cracked it.. actually just passing the hot potatoes round one another) another problem is liquidity.. a business may need a new JCB but cannot get finance, so JCB start laying people off etc these people then stop spending meaning others too see a down turn in sales and the whole thing snowballs.
Ultimately NO-ONE knows what will happen as there are too many variables, personally my fear is that sterling loses its value and we get hyperinflation like post War Germany - given our national debt, the fact we are no longer manufacturers etc I cannot see how to stop the decline.
We are all to blame really, FSA for not regulating, government for not stopping it, bankers irresponsible, us for being such zealous consumers and getting up to our eyes in it etc
Comment made on March 8th, 2009 at 5:32 pmReferences :
At the moment we have a "Race to the bottom" occurring. As companies big companies have for the past 10-20years being making the vast majority of their earnings on investing in the markets.
This is why mining companies are having to sack thousands of workers, not because people are not buying the resources, but because the losses on that card game of the "Stock Market" have grown so large, that to recoup we need to produce more with less people to achieve maximum profit to repay our debts.
So if a man was in so big a debt from gambling (like the corporations like GM, Ford, BHP, Bethel Steel, Shell, BP, Xstrata, most banks (Morgan Chase Commonwealth England HSBC Macquarie), etc. just look at their annual reports online) we would naturally reeducate the poor guy.
To reeducate a company though is to put it through bankruptcy reorganisation, get rid of the directors and managers who were pushing us for the past 20 years towards the crisis we are in today. Send them back to school and replace them with level headed business people (not gamblers) who can increase productivity and wipe the debt.
Comment made on March 8th, 2009 at 5:57 pmIt will take most likely a generation.
Maybe we could also limit and ban companies exposure to such events as the hedge fund and sub prime collapses.
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I agree with you.
All the Gvmnt wants us to do is keep lending and buying to keep the banks working. They have even decided to give all of the banks huge loans of taxpayers money!
Pisses me off that if a person or even a big company could go bust and they dont get any help….and yet these twat bankers played all the wrong cards and WERE BAILING THEM OUT!!!!
Comment made on March 8th, 2009 at 6:38 pmReferences :
I feel that people should understand what they need to survive and put aside the things that are less important.
Comment made on March 8th, 2009 at 7:13 pmMeaning, We buy like there isn't a tomorrow and what we have is way too much. We live beyond our means and I think if we put a list of what an average family needs as a guide, I feel that people might be able to see just how far they are from being needful compared to wantful.
We are a greedy people and don't listen very well. So maybe everything I am saying is just hopeful thinking?
But, if we were to at least slow down on what crazy purchases we make and save, maybe we would be able to afford things, rather then buy on credit. Although some credit is good, but like the banks don't get it either, they buy these huge buildings and then can't even afford using them. Again, crazy spending.
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WOW…whether Smiley is a girl or a guy, young or old, Obama should initiate her / him into his change plans as the facts of foundation certainly are well placed…
Now, cool, let's pinpoint your question closer with a better understanding of "life" as we know it. The world spins on two axis…one of need and one of greed…! Because there are but these two axis, the greedy have only the needy to feed off of…
The baby boomers built America into a prosperous nation, world renowned for its quality, perfomance, technology, wealth, generosity, power and its freedom amidst a growing interacial population of indifference and did so following the great depression era…
SO WHAT HAPPENED…?
Well, the last five generations following the baby boomers have seen the greedy usurp the lavish gains made possible by the baby boomer generation…
Industry corporates traded American jobs for high profits earned from cheap foreign labour. American products diminished in American factories as these factories slowly became assemblers of foreign made products… That seemed not enough for the greedy as they went further to take away American jobs by even having assembly of major products done overseas…airplanes, as but an example, which providee for hundreds of thousands of jobs in America. And now, as you surely are aware, the American automotive is defunct and represents a risk of three million jobs for Americans while yet foreign car makers are assembling right here on our own soil…
The greed did not stop there, cool, as our political leaders themselves got on the money wagon and managed to shadow our third political party and distant themselves from those they are meant to serve. This holds true from the lowest level of a small community to the highest political office in the land…the President of the United States…!
Politics has become the "self-preservation of the species" with having no concern for the people that voted them into their office…!
OUR GOVERNMENTS EITHER CREATED OUR PROBLEMS OR CONTRIBUTED TO THEM…!
Then, at election time they campaign to fix those very same problems… That now is the political cycle…!
This evolution of the post baby boomer generation has eliminated the middle class and jeopardized their retirement as well as gobbling up most of their savings…
Now that the greedy have accomplished that they have only the needy to feed from in order to fuel their greedy desire to become world powers in industry as they manipulate monies and people worldwide…
FOLLOW THE MONEY, cool, and you will find the answers… Americans now pay over half their income in taxes and it will increase even more in the very near future…
Your question of how to solve the credit crunch is quite simple to answer, actually… Banks that have managed their business well can even right now lend money to credit worthy people. Yet, if those borrowers are about to lose their jobs then the banks will hesitate to make loans…that's a sound business practice. However, for those having cash assets set aside the banks do still give loans… In other words, the banks themselves are caught between need and greed also…
THE ANSWER…??? More regulation thru "socialization". Some people say that is communism but it really isn't… Five decades of "de-regulation" has created a monster we now must kill. We must return to more government control and more accountibility for our actions on any level of our lives and the space we occupy…
A GOVERNMENT CANNOT FUNCTION WITHOUT INCOME AND UN-EMPLOYED PEOPLE CANNOT PAY TAXES TO SUPPORT A GOVERNMENT…!
Capitalism is but a ride to greed and has now caught up to itself. America must recognize that a Socialistic-Democratic form of government is far better than the greed machine it has spawned thru capitalism…
So then, cool, the final solution has to be the first solution and it appears Obama agrees with me. AT ALL COSTS, GET PEOPLE BACK TO WORK DOING ANYTHING THEY ARE CAPABLE OF EVEN IF DIGGING DRAIN DITCHES AT ROADSIDE…
We can deal with our other problems later as they definitely are not going away on their own…
I hope this helps to settle your reasoning, cool…
Comment made on March 8th, 2009 at 7:53 pmReferences :
Dr Who…
The whole reason we are in this mess it that the banks loaned money to businesses and people who aren't paying them back. Its not just the bank, the businesses, the government, or the people. Its everyone combined that screwed this up. Banks lent money just because they could, failing businesses took loans to stay afloat, people are declaring bankruptcy and doing dept settlements at an alarming rate, and the government wants to bail out everyone, but has no real money. The more people and businesses that just buckle down and pay their bills that they signed up for the better off everyone will be. This even includes myself. I recently paid of 3 years worth and $32,000 of credit dept and the bad part is I don't even know exactly what I spent all that money on.
Comment made on March 8th, 2009 at 8:36 pmReferences :
Hello CoolFox,
Your question is "What is the best solution to the credit crunch?" and I'll try to briefly address that here.
Everyone has their own solution, whether it's more free-market capitalism (which actually helped cause this crisis) or state control type socialism, or anything in between.
Nearly all these solutions, even (or especially) those coming from politicians and economists, are phony, and I'll explain why.
The credit crunch is simply a continuation of the system that nearly all the world has been saddled with for hundreds of years now. It's the latest twist in the saga, which includes numerous bank crises, slumps, booms and busts, Wall Street crashes, recessions and depressions. You could even go back to the South Sea Bubble of the early eighteenth century (look it up on Google if you've never heard of it). My point is . . .
It's all part of the same insidious system that puts nearly everyone in debt!
This system also foists us with a laissez faire free-for-all type of "free trade" policy. What this means is that big corporations can close all their American and European factories down and transfer industrial production to the far east or wherever else they can get workers to work 14 hours a day for a dollar a day.
Then "free trade" forces us to compete by letting their goods into our markets. Our factories have to cut wages, make redundancies and layoffs and eventually go out of business. That's why we in the west don't produce anything any more and have a massive trade imbalance which we can only "pay" by borrowing money from the international money market.
And who controls the international money market? The same people who force "free trade" on us and who ushered in the credit crunch by withdrawing lines of credit to smaller banks (and even bigger banks like Lehman Bros) at a vital moment, just like they did in 1929.
We need to abolish this hideous system altogether, not just look for some quick-fix "solution".
For a glimpse of how the world is really run by no more than 6,000 people, most of whom know each other, read "Superclass" by David Rothkopf, available from Amazon. It will truly blow your mind.
So - the best solution, then. We should work to replace the present, discredited financial system, which is debt-based, with a system of national finance for each country, so each government issues its own money debt-free. If they screw up we vote them out at the next election. There's no option to do this to the elite of David Rothkopf's "Superclass", the cosy coterie of private banking families like the Rothschilds, who have amassed colossal power over the whole world and are completely unaccountable.
Comment made on March 8th, 2009 at 9:22 pmReferences :
http://www.ancientbankingsecret.com
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