Are the bailouts working? What if they don't solve the crisis?
As we look the Government Bailouts, the question should be asked, what will happen if the bailout expenditure continues and still fails? If countries like America and the UK among others, continue to try to spend their way out, by supporting more and more industries are they going to force the Governments caught up in the crisis to follow even further than has already been seen.
Why! Because those industries that get that support will express that support by knocking out those who can not get that support or refinancing. They are also going to batten down for the continuance of the Tsunami effects exacerbating the Crisis. This will result in enormous unemployment increases world wide, and continuing pressure and the Dollar, Yen and Euro as well as Sterling, will deteriorate. These currencies are listed in the order of the strength value.
Banks like the FED will try to say these loans must follow the normal banking interest rates cost of the market lender’s value of interest. Banks will not want to compete with these lending options for refunding/refinancing the capital needs these markets and negatively affecting the bank desire to lend to business markets. With interest rates down and the banks not lending, to over-inflated and indebted companies these Bailout recipients will expect near national bank interest rate figures for these loans. This will stimulate a further spiralling direction down.
As the Markets begin to not just suspect the depth of Depression but plan for it. We are going to see more devaluing of the over-leveraged Industries in a shrinking Global economy drowning in their debt and servicing responsibilities, as we see right now.
The whole approach of the Bank Industry and Government is one of Secrecy and Confidence. Both of these characteristics are not going to suddenly state the situation the Finance System and Governments are in. We are now seeing the stress between their relationships exposing itself, banks having less political pressure than Governments, now that the language of fault and responsibility is shifting to the Governments, the Banks will keep their head down.
The process of Government Spending, as a way of moving forward, will be unlikely to change the direction and outcomes ahead. Whilst keeping parts of the system alive in the short term. What it may do in the short term, is delay what is happening, not only in the above stated economies but around the world: Debt, Over inflationary value of all things tangible and non-tangible, as well as Over-Leveraged entities and these are just the account issues.
Frugal house keeping and not leaving one self over burdened with debt and or Over-Leverage as the finance market call it, would be the logical act just now and for the future. One peace of important advice I would feel confident to state is to consider buying a little bit of Silver. Maybe 5 to 10% of your available annual cash, its cheap (at present) a tangible asset (or real Money), and in the very worst of circumstances you could have an exchange mechanism and valued coinage. If my studies and advice are correct the returns could be between 500 and 5,000% return, yes, that isn’t a typing error. It’s just my view.
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