The Credit Crunch - Have you been affected?

With the US investing $700 bn into the capital markets to increase liquidity in the banking system apparently the US government does not have a problem borrowing money; the $700bn bailout is being borrowed from international money markets.
Although half of the US debt is held by the Federal reserve about 30% is held by international investers/governments. The US public debt is now at about 60% GDP. If inflation increases then the value of this debt to be repaid to foreign investors is reduced. Similarly, if the dollar falls in value, the value of the debt returned to foreign borrowers will be reduced.

If borrowers outside the US stop lending to the US then there could be big problems affecting the supply of money available to the US government to spend. The money supply could be maintained by printing money, but this could lead to hyper-inflation. The way inflation is controlled is through Interest Rates. This causes a problem because with a large amount of public debt the amount that has to be paid each year in interest to maintain the debt will also increase.

How have you been affected by the credit crunch?

 

 

 

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The effect of credit crunch is global, it is not localized to US only, but has a broader effect. All the stock market of world are going down and almost hitting lower circuits daily. Today also Indian stock market was hammered badly and lost 8% in first 5 minutes only.

Also as many banks are filling bankruptcy daily, many rumors are also prevailing in India, the latest one is regarding one of the biggest private bank of India, ICICI Bank. Its stock price is moving downwards. People are making long queues in ATMs to withdraw there money from ICICI bank and moving to some other banks. Inspite of RBI and Government clearance about the matter, rumors are not stopping.

So I think credit crunch is going to have a big toll in world financial market and will last for few more months if not years.

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boy did i disagree with that bailout. if companies are disorganized, paying their executives more a minute than i make in a month, use poor judgment and and execute bad choices in the short run, these financial instituations deserve to go under. saving them ain't gonna help much because people are already panicked. some are even buying gold because they don't like the value of the dollar anymore. borrowing power will never be like it used to due to learning from past mistakes DESPITE the bailout. now there is talk about the government buying up the mortgages? how much more money is that gonna cost where we don't see a real big difference in the economy? private individuals have lost billions of dollars already. the dollar is still overvalued in my opinion even when the said value isn't anything to brag about as it is. i think everyone is suffering and will continue to suffer. too much crap invloved here to mention and too much crap invloved where there is no doubt EVERYONE is being affected one way or another unless you live in the back woods somewhere where you grow your own food and raise your own livestock and self sufficient.

it pisses me off about this bailout. 700 billion dollars to get invested back in to the companies that are high risk. gas prices dropped because people have no money and can't afford to drive as much and the oil companies are probably the only ones not really suffering since they could lower gas another .50 at least but will always rip us off with what they can get away with.

anyway, i am pissed. i think we should let the big companies go under and maybe it will hurt the economy in the short run, but in the long run, it will make room for growth for other compaines that don't make bad choices.

i believe it's gonna get worse still before and all the while our government is saying "if you mess up, we'll bail ya out"....but only if your fortunate enough to be a ceo of one of the biggest companies in the world that can make or break an economy. screw that noise. what about the littler compaines out there struggling where they are as stupid to create more credit than they can afford? what about the little guy? i voted for bush and he's a friggin' IDIOT! the same idiot making decisions like the one he made when he waited a week to visit the natural disaster hurricane katrina created. bush is probably benefiting some way in his last days in office by this so-called bailout plan. i wonder what HE has to gain from this....

 

 

 

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The problem is thought that economy is tied to the world economy and if the United States goes under, you can kiss the world economy good bye, because right now in just one year the US stock market has lost almost 7000 points and counting. We are back to numbers from almost 8-10 years aog and I wouldn't be surprise if big companies start going under, we already know the banking system is gone and s it is just a matter of time that people's bank accounts start disappearing in order to pay for this crises. I wouldn't be surprise if Osama shows up and says this was our plan all along, and I am still waiting for a headline ot say Bush the worse US President since Herbert Hoover since he started the chain reaction for the Great Depression I. I would be surprise if the dark ages happen again and countries start wars to to expand their territory and what not, sure the apoclypse isn't going to happen but this crises is not being fixed and those who need to fix the problem are not because they are trying to save their money and assets before trying to save this country.

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credit crunch? i thought you people were talking about this! that's one SWEET credit crunch i'd like to have. i was watching late news on local TV earlier and that "credit crunch" was one of the features and i just thought, what a coincidence.

more seriously, on local TV again:
* overseas filipino workers and migrant filipinos living and working in the USA feeling the pinch of the economic crunch; an expectation of massive lay-offs in the near future, and consequently a great reduction in dollar remittances to our third world country, from which philippine economy largely rely on.
* reduced philippine exports to the USA (biggest market) owing to its failing economy
* singapore falls into recession...
* indonesian stock markets has suspended trading since wednesday
* asian stock markets in asia generally fell an average of 8% as well today
* saw an outdoor digital display showing the american national debt: US$ 10 TRILLION+ (and they had to ease out the dollar sign a bit to include the 1 on the 10 since the display run out of space... a sign of troubled years to come? bailout legislation passed by the US Congress would raise the debt ceiling further to US$11.315 trillion. note: just before GWBush took over, it was just around half that much, or US$5.7 trillion)

the only news which made me smile actually was the "credit crunch" i linked above. very gloomy days ahead...

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Mainly I'm indirectly affected , although I have my own source of income , a slice of my parent's savings disappeared when Online Bank IceSave went bust. They spread their savings across several banks to reduce risk , but they lost almost 10% of their money they had altogether , and since nothing has been done by the British Governement to recover that money , it doesn't seem as if they are going to be compensated. Justice system is messed up in england. The Goverment has bailed out two major banks and now has no money to compensate for lost money of customers. And it keeps on lending to other countries when we need it more >_<. Dammit Gordon Brown!

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