My Analogy for the Financial Crisis

by: Markham Lee

Imagine that there is a large pit with the economy in it, and that there is a loader dumping dirt on the economy/into the pit. Now on one side of the pit there are people hurling shovels into the pit so the people within the economy can dig themselves out if it, and on the other side a SWAT team is trying to stop the guy running the loader. However the guy running the loader is also protected by a small security force, so it may take the SWAT team a little bit of time to overrun their position.

The point?

The rate of economy decline (for the moment) is probably progressing faster than the current solutions can combat the existing problem let alone the new problems coming the pike, so even if the solutions are good ones things will still get worse before they get better. It also means that there isn't a quick fix available, and anyone looking for such a thing from the government or the private sector needs to grow up. We're going to have to hang tight and endure for a bit, whilst the problems run their course and the solutions begin to take effect.

Disclosure: at the time of publishing the author didn't own a position in any of the companies mentioned in this article; the ideas expressed are solely the opinions of the author and shouldn't be viewed as financial or investment advice.