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The World in Financial Crisis October 12, 2008

Posted by emuleman in Thoughts.
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Now I do not pretend to know a lot about our economy, or how the stock market exactly works.  I of course know how the average middle class person is affected with this daily flow of bad news about our current financial situation.  It is becoming difficult hearing daily stories about our economy and the markets worst losses since the great depression.  I myself like most average people don’t buy and sell stocks on Wall Street, or speculate on how much oil will go up or down to make a living.  I work hard to provide for myself and my family.  Lately I am becoming increasingly nervous of seeing our economy slip further and further into a recession.

I am lucky that I get a daily opportunity to directly talk to different people about a wide variety of things who come into my work .  Lately the only topic that is discussed is the economy.

It is hard not to talk about the economy since we are constantly being feed more bad news about it by the media.  You cannot escape it.  It is on the radio, the television and the Internet.  I am convinced that this constant bad news is now finally beginning to take hold in most peoples minds, and is becoming a self fulfilling prophecy.

The average person is beginning to become more careful with their money.   When people begin to re-evaluate their spending habits they become more responsible and spend less.  They begin to tighten the belt, and eliminate all unnecessary spending.  This in turn stops the flow of cash into millions of small businesses across this county and the world.  Businesses start making less revenue and also are forced to reduce their spending by laying people off and in the worse case closing their doors for good.

It is depressing for me to see companies that have been in business for decades to be hurting and on the verge of bankruptcy or closing.  All the US auto makers are really hurting, and another huge Government bail-out rescue is already being discussed to save them.

Some people are lucky and not directly effected by this downturn in the economy.  They are paid a salary that has not changed.  They do not necessarily feel the squeeze like many of us who rely on commissions for their income.  We have seen a decrease in our pay because we are selling less.  They have not felt the decrease, but are now beginning to get the impression that things are getting bad with our economy with this constant flow of bad news.  This cause them to also stop spending, and the whole situation now becomes much worse.  The more people who stop spending, the worse our economy gets.

The only way to fix it is to have more money being spent by everyone, and to increase the flow of cash.  At the moment this just isn’t happening.  Banks are afraid to lend, and most people just aren’t spending like they use too.  It becomes a vicious circle.

Now I hear that this recession is spreading to Europe and Asia.  It seems we all are tied together closer than we use to be, because we are now a world economy.  We all rely on each other, and when one economy is suffering it is felt across the world.

I have always considered myself an optimist, and tend to look at things positively.  I just hate to hear this constant flow of bad news.  Don’t get me wrong, I believe our economy is definitely suffering right now.  Mostly because of banks giving loans to unqualified people, and corporate greed on Wall Street.  But I also believe things are not as bad as you hear on a daily basis. We are fortunate to have the technology to get news 24 hours a day, but at a price.  This constant flow of negative news just compounds the problem and makes it worse.

I believe the American people have dealt with much tougher and harder problems.  We will come out of this recession like we have before.  It might take a while, but we will have a strong and growing economy in the future.  This I am sure of because the American people and determined and strong.

I suggest we all stop listening so closely to the media, and try not to believe that the worst is going to happen.   We need to continue to live our lives without the fear.  Don’t be afraid to spend some money if you have some to spend.  If everyone would take this advice the economy would be well on its way to a full recovery.

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