investokai

The Credit Crisis: Solvency vs. Liquidity, and Why Bailouts Won't Help

Why is there such a huge concern for growth in the global economy today? We have made it possible to let people live way beyond their means, what their REAL worth should allow them to. I think people need to take a good look in the mirror, and change their lifestyles and understand that some things in life might just have to wait... instead of taking on piles of debt. The last 5 years has seen some serious growth but I wonder... how much of this growth was funded by debts that are still outstanding, and possibly debts that can not be paid? I think the greed in the finance industry, along with the blatant foolish spending of people without money, is finally unraveling completely. Stability is more important than growth when growth isn't backed by any real value. It's going to be a major adjusting year, people will lose money but hopefully it will teach us all a lesson to learn to live within our means. Growth is not as important as stability in developed nations. And now to try and create growth over the past 5 years, instead of producing more efficiently or creating new innovative products, we simply made things available to people who couldn't afford it, to increase spending, which looks good on the books, unfortunately, a lot of that money will never be seen.