Posted by: martinworster | October 18, 2008

133. FINANCIAL ARMAGEDDON

It’s hard to gauge how serious things are currently in the the big bad financial world. Reading the media you’d think the world was about to end. Which doesn’t help matters as it’s a self perpetuating feedback loop. People read the bad news, feel poor and worried and don’t spend any money and everything rapidly gets worst and then even more people lose jobs, feel skint and don’t spend etc etc. Then the media really can start to hammer on about financial apocolypse. It’s almost like their egging it on, too powerful for their own good and creating situations and events without realising it, like a blundering two year old boy knocking things over as he runs riot in a toy shop.

I’m not an economist but this whole situation begs a lot of questions. People talk nervously about what’s happening. Is this just the start of something really bad, like 1920s depression style? Will I be queuing for a bowl of soup in eight month times at a governement run soup kitchen? Or will it be a six month blip and with a new President in place will everyone get back to normal? Questions if we knew the answer to I suppose we’d be very rich, hedging my bets against global economic trends Warren Buffet style. Hedging? Isn’t it those master of the universe hedge fund managers with more money than sense who are culprits also?

Something had to happen as you can’t have eternal year on year growth. We can’t all own properties that double in value every five years. There has to be some sort of checks in place. Banks can’t lend people money on properties they can’t afford and expect no come back. Odd when I think, that Washington Mutual, whom I bank and have my mortgage with, were recently bought out by Chase Bank as they were on the cusp of going under. Going under? I just read my mortgage statement and I have paid over 20 K of interest this year on my mortgage. How could they have nearly gone bust? And there are millions more like me paying silly interest. Like I said, I am not an economist and I can’t get my head around this.

It’s the end of a certain type of capitalism. It’s the end of living beyond your means on continual credit. It’s hopefully the end of that dreadful period of empty bling and unashamed materialism of the late 90s / early noughties. Hopefully it’s a message to rein in our consumption habits and live more frugal, simple and ultimately happy lives.

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