Perfect storm approaching as credit crunches

It’s official we are screwed. The swarms of financial locusts have finally managed to wreak monetary pestilence over USA and the world even. Today reported in the Daily Telegraph a report by Morgan Stanley issues a ‘full’ US recession fueled by bad credit and dodgy financial somersaults. This circus act is about to end in tragedy and dispare for millions of homeowners over America and Great Britain.

With USB the Swiss financial giant being bailed out to the tune of 10 billion dollars due to badly lent ‘subprime’ mortgages. It is hardly surprising that this trend would continue to fuel speculation and worry amongst home owners and traders alike. The knock-on effect of this is that businesses are hit by the hesitance of financial institutions to lend to each other and you alike. the net result is that fewer mortgages are approved and borrowing in general becomes more scarce. The backbone of the modern economy based on borrowing has been hit and those in the enviable position of having to re-finance their properties will be hard pressed refinance.

It seems that labours ‘promises’ of an end to ‘boom and bust’ was bullshit all along. Though even the most short sighted ignoramus would of been able to have predicted this most predicable of outcomes. People blinded with their obsession to ‘own’ a house that doesn’t actually belong to them in any even and willingly enter into financial serfdom won in the end and now they will pay the price to buying into a massively inflated market.

Is it the fault of the people that borrow or of the financial institutions that lend the money? The responsibility for this crisis has to be placed solely on the shoulders of the financial system as the poor milking cows of the population are steadily fed a detritus diet of consumer signs to condition them into a sense of being where this illogical system is deemed ‘normal’.

Since when is basing an entire economy on unsustainable debts and continual inflation normal? Money has lost all sense of value and now people are thrashing around trying to recoup their imaginary money. If it wasn’t real it would be truely bizarre.

Speculation that there could be a 40% decrease in the construction of new houses due to the glut of unsold units in the United States can only fuel the uncertainty and worry in Europe. That and with the foreclosure on mortgages running at a 19 year high adds yet more fuel to this fire.

To put all this into perspective Morgan Stanley has likened the situation enveloping America to the financial turmoil which engulfed Russia when it defaulted on its obligations. Truly a worrying scenario.

The article from the Daily Telegraph can be read here.

Also an article from the Financial Times here.

Explore posts in the same categories: Europe, Politics, UK, World

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