Monday, February 16, 2009

Questions about the credit crisis


The stock markets around the world continue their downward slide. Business confidence is low.

Why?
Lets discuss.

Who is to blame?
No one person or country is to blame, that is why the Credit Crisis is a global problem. We are going through a correction in the market. Businesses have been forced to reduce their borrowings.

Where has the money gone?
Nowhere. Hard currencies are still in the economy. Things are tough right now, because it is harder to borrow money to grow your business or investments.

How is this effecting people?
Companies are down sizing and people are loosing jobs. This has left people and businesses scared, people are acting much more conservative. Instead of investing everyone is paying down their debt. This has reduced the flow of cash in the market.
Money will return into the economy when people are confident. People shouldn't be waiting to see what the government can do, instead ask yourself what can I do to stimulate change and confidence?

When will things get better?
I believe this market correction is passing and will leave a healthier financial system. These difficult times are caused by businesses becoming less dependant on borrowings. I am confident the companies that survive the turmoil are going to be great investments.

p.s These are my personal opinions, I would like to know what you think?

picture by sanja gjenero