Reasons For Financial Crisis - Learn How the Vicious Cycle of Recession is Affecting Our Lives
Our Economic Crisis
While most of us are still trying to keep our heads above water financially, there seems to be some clear evidence that things will get worse before they CISAget better. The important thing to keep in mind is that this is all cyclical and we should eventually hit a recovery period. Keep reading to learn the reasons for financial crisis
What Recovery?
I keep hearing some chatter about "green shoots" and signs of economic recovery. Whether the reporters are all simply overly optimistic or intentionally deceptive, the truth is there are no signs of recovery. Although our current economic crisis is the worst we've had since the Great Depression, the signs relating to the reasons for financial crisis all indicate things are not going to improve any time soon.
Four Elements of Recession
1. Bailouts - The government continues to have to issue huge bailouts to lending and insurance institutions. These two huge sectors in our economy, previously prohibited from doing business together, were deregulated during the Clinton Administration. It's important to note that the original legislation which regulated these two industries was put in place after the Great Depression in response to the causes of that crisis.
This deregulation allowed these two separate banking industries to once again invest in each other. Now that they'reCISM all on the verge of collapse due to their shady investment practices, if the government does not bail them out our entire economy could implode.
2. Deficit - Our current national debt is already close to $7 trillion and there's no end to the spending in sight. As stated, the government has to continue to bail out these banking institutions to avoid a total collapse of the market.
3. Interest Rates - Interest rates continue to rise as a result of all these. Increased interest rates mean decreased corporate profits leading to more lay offs, rises in consumer debt and continued crashing in the housing market.
4. Inflation - The Federal Reserve responds to government debt by purchasing the debt in exchange for government approval to issue new currency. The Fed is a privately run international institution with no vested interest in the health of our economy. Printing new currency results in sharp devaluation of the dollar which is the actual cause of inflation.
Pyramids
A pyramid scheme can be CRISCdefined as a system by which the top 1% of a company are the only ones to ever make any profit. The rest of the people holding up the pyramid are all promised they will receive a portion of those profits but they never do. In fact, they're left holding the debt while those at the top get richer. The reasons for financial crisis
While most of us are still trying to keep our heads above water financially, there seems to be some clear evidence that things will get worse before they CISAget better. The important thing to keep in mind is that this is all cyclical and we should eventually hit a recovery period. Keep reading to learn the reasons for financial crisis
What Recovery?
I keep hearing some chatter about "green shoots" and signs of economic recovery. Whether the reporters are all simply overly optimistic or intentionally deceptive, the truth is there are no signs of recovery. Although our current economic crisis is the worst we've had since the Great Depression, the signs relating to the reasons for financial crisis all indicate things are not going to improve any time soon.
Four Elements of Recession
1. Bailouts - The government continues to have to issue huge bailouts to lending and insurance institutions. These two huge sectors in our economy, previously prohibited from doing business together, were deregulated during the Clinton Administration. It's important to note that the original legislation which regulated these two industries was put in place after the Great Depression in response to the causes of that crisis.
This deregulation allowed these two separate banking industries to once again invest in each other. Now that they'reCISM all on the verge of collapse due to their shady investment practices, if the government does not bail them out our entire economy could implode.
2. Deficit - Our current national debt is already close to $7 trillion and there's no end to the spending in sight. As stated, the government has to continue to bail out these banking institutions to avoid a total collapse of the market.
3. Interest Rates - Interest rates continue to rise as a result of all these. Increased interest rates mean decreased corporate profits leading to more lay offs, rises in consumer debt and continued crashing in the housing market.
4. Inflation - The Federal Reserve responds to government debt by purchasing the debt in exchange for government approval to issue new currency. The Fed is a privately run international institution with no vested interest in the health of our economy. Printing new currency results in sharp devaluation of the dollar which is the actual cause of inflation.
Pyramids
A pyramid scheme can be CRISCdefined as a system by which the top 1% of a company are the only ones to ever make any profit. The rest of the people holding up the pyramid are all promised they will receive a portion of those profits but they never do. In fact, they're left holding the debt while those at the top get richer. The reasons for financial crisis
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