Posted by: martinworster | April 4, 2008

98. CREDIT CRUNCH

It’s amazing how you get slammed from all angles by companies desperate to lend you money in the US. Since getting my Green Card and subsequently my Social Security number I am now a financial entity and the credit companies are circling like vultures. It raises interesting questions about the very essence of the US business model and the current economic slump which is quickly turning the American Dream into a complete nightmare.

On a individual level a false economy was created on the back of an inflated housing boom that made people feel richer than they actually were. Borrowing against the value of houses to fuel the pursuit of the American Dream; multiple car ownership, Plasma TVs, BBQ pits, swimming pools and the relentless pursuit of materialism that reaches it’s apex out here. Also in cahoots were the mortgage companies, greedily lending to everyone  and anyone to fill the vast tracts of new houses being built. The whole sub prime fiasco – lending to people who couldn’t afford it. And now the greed has self combusted and it’s still probably too early to really assess the damage as the shit is still settling.

Then Bush announces his Federal remedy of giving every tax payer a financial break – I think it’s around $600 to every individual. So this will create another mini false economy as more spending temporarily injects money into the economy for a few months till it runs out again, a small plaster over a gaping wound. But great, we can all briefly worship at the altar of consumerism for a short time, LCDs and Apple iPhones all round! It’s Mickey Mouse economics. It’s like a small boy with his finger in the hole of a massive, surging dam about to explode.

Then on a macro scale is the fact that the US government is in debt to other countries. China first, then Japan and then interestingly, the third biggest lenders to the US is Great Britain with $171 billion. I’m no economist, I don’t – and I don’t think anyone else does – understand how it all meshes together on a micro and macro scale but it all seems like the American economy is on very flaky ground indeed.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

%d bloggers like this: