reply to post by Relentless
And aren't we already there (too much credit)? If the EZ is taking such drastic measures that they are going to actually compound the problem
exponentially from what I see
Yes, pretty much.. that is exactly what they are trying to do. Everywhere everyone is trying to do this..
Credit was a disease in our economy.. when money owed to a ratio of money in actuality, or even the ability to raise money is so far out of
proportion, by God the system will fail. Look at Iceland, with $110 BILLION in exposed debts .. and only $14billion in GDP ..
But if debt was reined in, pulled back, cut, or suspended in anyway, the economy would have collapsed.. so you extend a little more.. a little more ..
little at a time .. This all gives the illusion the economy is fine, growth and prosperity.. then like a rubber band pulled to tight, it snaps, and
the whole system comes down.
Our current economy is an illusion.. we are a people that produce nothing.. most of our jobs in this country are service jobs of some sort that
service our own people.. like a massive revolving wheel of wealth, so long as the ones on the bottom get paid enough to secure the debts they have
while expanding credit lines via HELOC's and Credit Cards, the Service Economy of Debt can continue to expand.. giving the illusion of wealth,
prosperity, and happiness.
So if the banks are secure in loaning money, the businesses that employ the Consumer, the life blood of the economies, can continue to pay them, if
they get paid, and can continue to expand credit then the economy sees "growth" ..
SO FAR ... the average person has not been directly effected by the situation given it's severity.. unemployment is rising, inflation is rising,
consumer confidence is falling.. but if the system is fixed before the consumer directly on a massive scale is effective, the economies of the Western
World will survive this..
But without credit extensions, the consumer cannot consume... and if our current wage's do not rise in proportion to the needed credit expansion for
the economy, the economy will stagnate and eventually collapse in on it's self.. we will literally be eating our selves from the inside out..
If you have not noticed since 2000 foreign capital infusions have been needed to sustain the large corporations that employ the Consumer.. capital in
many corporations is collapsing, the infusions from abroad are not coming in as easily, and now they cannot take out short term loans to cover
expenses and even payrolls...
Give it a few more weeks, and I believe we will see hell break loose across the World as industries fail...