Has the US bank crisis shaken your financial confidence?
By sharone74
@sharone74 (4837)
United States
November 25, 2008 10:46am CST
What I mean by this is that consumers here in the US are spending less and less money and trying to husband and hoard as much money as they can because of a lack of confidence in our nations financial security. For the last several months it has been one horror story after another with the collapse of the American financial infrastructure. Even if some people have set aside money for a rainy day, in the conspicuous consumer mode that Americans have been in since the Great Depression of the 1930's, the credit industry has far outstripped the amount of real money that exists in the country and we are now facing the shortfall for the loaning out of all that non-existent cash. I am sure that the banks were trying to force the fed to print more to cover the cash that they have known for a long time is on the books either in the debit or credit columns of their ledgers but that in reality doesn't exist and never did. They were floating their bottom lines on this credit cushion. And now that no one is loaning money from one bank to another this cushion has now been pulled from beneath their complacent rumps and made them acknowlege this fact. I personally feel like this is the fault of the federal government for allowing these financial institutions to go so deeply into the hole and for keeping them from realizing the jeapardy that they had put themselves in with their lending practices, until it was almost too late to save any of the financial institutions. In the end I think that most of that money is being misappropriated as quickly as possible when the fact of the matter is, that the money still does not in reality exist.
2 responses
@LaurenInLA (2270)
• United States
27 Nov 08
It's shaken my confidence as well. I have a job and I feel that it is secure yet, I'm afraid to spend money because I don't know what's going to happen. Instad, like many other people, all of my planned big ticket purchases have been put on hold and I'll just make do with what I have. You're absolutely right, the money that the government is lending in reality does not exist. What a burden we are putting on the generations to come. At some point, all of this money is going to have to be paid back. What's more frightening is that we don't know how many more bailouts are to come. You are spot on in your statement that this is the fault of the federal government. They allow so much deregulation in the financial services industry that something like this was an accident waiting to happen. It's also infuriating that Fannie Mae and Freddie Mac actually bought so many of these bizarre loans that were backed by the U.S, Government. Very scary time for all of us.
