Radical measures are needed to survive the credit crunch and to get us out of this terrifying financial dilemma, where theequity market just keeps on free falling, and the economy is surrendering to recession, the almighty dollar will rally a little help on by sheer aggression of the fed’s monetary respite, but this powerful and worrying situation will continue well on into the future.
Only a few years ago investors thought interest rate cuts was the answer to our problems and guaranteed financial stability, it may have worked back then, however, today we are dealing with a new concept of credit. And it’s called credit crunch, the economic prospect ahead is terrifying, unconsciously powerfully worrying.
With the coming recession making the future looking rather gloomy our best effort seemed to be bringing negative response, reducing our disposable income to a minimum. The harsh reality is that things will get much worse before they get better, best way out at the moment, is for everyone to tighten their belt and prepare a for a rough ride to safety.
Countries never wanted to play rough, nor did they ever thought they had to against their will, but today’s economic aggressive market requires no holds barred, and policy holders have become engaged in a far from elegance pace setting game, everyone across Europe knows that the US financial system which for many years was reliable is now facing a crucial meltdown, this may not be for the most the worst scenario nor do we hope it will be the ultimate outcome, but there are fears and edgy nerves coming apart at the seams.
The likely ending is that the US investment bank will be bailed out giving a strong recovery to the weaken balance sheet, so investors will not see the pressure on liquidity, a day is a long time in the finance world, think what damage a bad week could do towards the dollar, rescue packages will raise some very big questions, until now the answers are limited, but it’s possible to argue the point about where authorities have got things wrong.
How could Northern Rock collapse so dramatically stemming from the bank of England s failures to inject vital liquidity?
And it’s strange behavior, along with the ignorant unwilling decision not to cut interest rates? Also we need to take into account that the authorities seemed unwilling to some degree to find a resourceful buyer, and of course the government also had a big part to play, because they showed immaturity in their lack of insight to bail out Northern Rock from the their distress. Injecting reserve liquidity sooner would have stopped the jitters and guaranteed investors their deposits were safe.
Taking decisive decisions during dark financial days is typically what we pay our fund managers to do, they are in the perfect position to look out for the best possible returns on investors’ money help along by the normally reliable system, when these avenues fails then optimism goes a drift, replace by growing skepticism, although interest rates have fallen along way and people seemed to have more spending power, there is absolutely every reason to be cautious, because of the ever growing nervous effect, which can so easily trigger off financial stability.
Loans will become harder to come by, and potential home buyers have to think twice about their repayment. Because value for money is what everyone is looking for, but the financial institutions are looking to make a little extra. So caution is the answer to all investment plans. Payments will always go up because interest rates are not stable.
Everyone who has a mortgage will feel the squeeze, and many people will lose their best assets that they have worked for over many years, try as they may, people are going to lose their jobs, homes and business, so it’s important to learn how to manage debt. When rates payment goes up good budget control must be introduce into familyfinancial plan.
The time for stupid mistakes are over, because as we have all been witnessing how the us dollar has virtually plunge to a new low, this is a worrying situation, to see the doomsday of our economy unable to strengthen itself against previously weaker economy.
The Yen’s strength is particular applauded, the Japanese astonishing currency is control by the central bank and they have the market on their side, much preferring the Yen to the ever shrinking dollar which is quickly heading down the creek without a paddle.
We are witnessing a breakdown in the financial institution on a mass scale that does not give any simple answers, rate cuts are not helping the US dollar, this is a credit crunch, the best that we can hope for, is a massive injection of foreign investment and I am presuming that we will take the safe route perhaps to offset against rocky times ahead, the world is a more intelligent place now and people are not easily fooled, they are quickly wising up to comparable decisions and need answers to the wealth of funds which has distort reality.
And if the e markets continue to nose dive it will lead to huger loses and in turn contribute to long term instability, leaving no alternative but for tax payers to reluctantly foot the damages and clean up the mess. It is coming a crunch when all overall financial review is drastically needed; there is no quick fixed solution as we witness the breakdown within the financial institutional system.
Banks have been increasingly forced to cut back on lending, overdrafts and credit limit have been slash to the minimum and the power that central bank possess has become steadily ineffective, even though the markets has created cash in the pockets of many householders, the turn up is without much impact, the projection for the future, is that
The economic strain will continue to sit down harder upon all of us.