What is happening with the banks, money and this inflation thing?
I basically havent watched any news in months and im trying to read up on whats going on but i dont understand any of it. The parts ive read are that the banks are getting loads of money and everything is going up in price. I really dont understand any of this, what is exactly happening in simple terms with all this money stuff?
September 2nd, 2010 at 5:10 pm
Does anyone REALLY understand it? I think they are intentionally making it so confusing so we don’t know how bad we are getting screwed.
September 2nd, 2010 at 5:27 pm
Not many of us do, that’s why the banks get away with so much. My question is what happened to all of the billions of profit they supposedly made last year, and the year before, and the year before etc etc?
September 2nd, 2010 at 5:47 pm
the banks have no money because they gave unreliable people loans who couldnt afford to pay them back.
its not necessarling everything is going up in price, its just people have less money, ie house prices are dropping cos no one can afford to buy.
companies cannot afford to keep people on, so there4 there have been thousands of redundencies especially for example here in ireland, the construction industry.
thats an idea anyways!
September 2nd, 2010 at 6:34 pm
your Dollar is soon going to be worth a few Nickles & your 401 will be 86ed… if you own Stock… your Fu@ked for a few years before your totally Fu@ked and a militant raciest hater will soon be President.
September 2nd, 2010 at 7:24 pm
Hedge funds, ceo’s, and govt. crooks are losing all our hard earned money. But hey, who cares it’s not their money. they just take it from us. Banks can know borrow money at a much cheaper rate than the past yes. There aren;t really simple terms to describe so much of a mess the markets in right now.
September 2nd, 2010 at 7:43 pm
There really isn’t any point in explaining it to you.
Just look really excited when anyone comes into the room.
September 2nd, 2010 at 8:26 pm
The banking industry had been making bad loans for the past several years. The real estate prices had been rising due to cheap finance rates and had gone through the roof. They raised the interest rates because they thought the economy was doing too well and the housing prices started to crash. A lot of the buyers had used adjustable rate mortgages and their new payments went out of their reach in affordability. This caused the prices to drop farther, leaving people with mortgages that were in excess of the property value, causing more people to just walk away from their homes. Hence, bad loans. The banks needed to write off the loans to what their true value was, reducing what they could loan for busineses and other purposes. Our economy is highly leveraged, most companies either borrow to make ends meet, or they have vendors/customers that borrow to make ends meet. Without the loans, payroll would not be met, new equipment not purchased, bills not paid, etc. The bailout was an attempt to stem the red ink at the banks.
The inflation thing is the fact that everyone has had to pay more for fuel and transportation; meaning that businesses needed to raise their prices to cover the added costs. This in turn causes people to require higher wages and more added cost. Pretty difficult to get a concise answer to two heavy duty questions here.,
September 2nd, 2010 at 9:06 pm
The banks aren’t lending money because they are not confident that they will get it back. Basically this describes what already happened particularly in America where a lot of loans were given to people that weren’t really capable of paying them back. The whole system collapsed like a deck of cards and now some of the security e.g. property that the loans were made on are worth less than the loan against them. People wishing to sell such properties (if they could sell them) would still be in debt. You also have to understand that this situation also exists with other securities on a larger scale around the world.
One of the things that hasn’t helped along the path has been the increase in the price of oil which has put up costs for everyone. Another, is the size of America’s economy, which has had some notable financial failures on a background of a financially expensive foreign policy, not to mention its foreign debt.
I believe the easily available high rate finance that was first promoted by finance companies at usury rates and added to by the banks with unbiquitous credit cards and more and more innovative ways to lend people money has been the cause of the problem that has developed over the last thirty or forty years.
Governments are now reducing interest rates and garunteeing bank deposits. Securities are being bought up by those with money.