Current Financial Crisis

In light of the present financial crisis, it's
interesting to read what Thomas Jefferson said in 1802:


'I believe that banking institutions are more dangerous
to our liberties than standing armies. If the American
people ever allow private banks to control the issue of
their currency, first by inflation, then by deflation, the
banks and corporations that will grow up around the banks
will deprive the people of all property until their children
wake-up homeless on the continent their fathers
conquered.'

If we would just listen to our founders and follow the principals the constitution set this would never happen.

 

This hasn't, nor will it, happen

 

Economy is starting to pick up, percentage of Layoff employment are down, that is a good sign.

 

I have to disagree with you there. The actual percentage of Americans who remain unemployed -- including those who have stopped looking for work -- is considerably higher than 9.4 percent and surpassed 10 percent months ago. By one measure, the unemployment rate is really 10.7 percent.

 

Critically you are right, but improvement in the economy is on a faster rate than before. Various mergers and acquisitions are taking place to support the companies, this is probably a good sign. The speed is slow but still measures a being taken to improve the situation.

 

its gonna get worse before it gets better. it still is getting worse. and its not just in america, its all over the world. the question is, the economy here is getting worse meaning its gotta get better somewhere no? where is it getting better?

 

It's too early to tell. The unemployment nubmers just keep rising. There are more and more people without jobs. Personally, I think the crisis is just slowing down. It will take months, if not years, before we see any improvement.

 

Certainly not Cuba... they are running out of toilet paper.

http://news.yahoo.com/s/nm/20090807/lf_nm_life/us_cuba_crisis_toiletpaper_1

 

I agree it's still bad but if you look at things like how there are less new people filing for unemployment is going done and other issues it clear that things aren't getting good yet, it seems that there is less bad being piled onto the currently bad economy.

 

We can focus on the negatives or focus on just making some money. I'm not too worried about the economy. Sure, it's hitting some people hard, but it doesn't have to hit you hard. I'm making more money now than I ever have.

Sean

 

Dude, you have have to understand economics. Basically you should pretty much understand the reason for the recession first before understanding who gains and loses.

The recession is mainly due to over speculation and investment on riskier financial products which are largely derivatives of housing mortgages(or in other words high risk loans). People who did not know much about investment and their risks bought these derivatives that were sold by investment bankers who were the ones paying the rating agencies to rate their products AAA(classic moral hazard). The reason the investment bankers sold these high risk loans instead of keeping them and wait till they get back their principle sum plus interest is so that they get their money back to issue more loans. Every time they sold these loans to the public, they gain commission.

Therefore they didn't care sh*t to who they gave loans to and were just more concerned with selling the loans back to the public or other banks to get their dirty commissions.

But obviously this exuberance cannot last forever and eventually many of the mortgage loans failed, in other words, the houses were liquidated and those who were in it are bankrupt. And those, the public in general, who bought the derivatives became <fill in a vulgarity of choice>ing poor.

As a result of this poorness in addition to a massive trade deficit of USA, the majority of the public and government spends less, hence a downward multiplier effect (this means that when you spend less, that lesser spending on your part, becomes lesser income for another), which means recession.

Oh yeah, now back to your question, did anyone gain from this?

Of course, I did mention commissions of investment bankers? Oh but not all bankers btw, some got pretty badly burned. Furthermore, when the stockmarket crashed many short sellers (people who bet on stocks going down) gained huge fortunes.

In terms of equal distribution of wealth, this crash meant that money was redistributed unequally from the public to a few rich individuals. Hence, the net consumption of USA falls.

Think of it this way, for a poor person compared to a rich person, a dollar would mean more to the poor man cos he would immediate meet some of his needs with that dollar. If it was redistributed to the rich, that dollar probably wont get spent as he pretty much have what he needs. Hence since the dollar is not spent, the economy loses a working dollar.

This means net loss to the country.

Add rep if this helps!

 

I agree - the only economy that really matters to an individual is their own personal economy - the rest is an abstraction!