Economic Chaos - A new World Economic Order

Posted by Ivan

The financial meltdown of 2008 is being called the worst financial crisis since the Great Depression. World economies is in a doldrums, brought on by the earlier subprime issues. Now, big and once called world class corporations, best in its own class that set the world best practices are falling apart and dragging down all others with it. We have seen the big big names - Bear Stearns Cos, Wsahington Mutual Inc, Wachovia Corp, Lehman Bros Holdings Inc, Goldman Sach Group Inc, Morgan Stanely AIG, Fannie and Freddie, and many more in Europe.

The US Government is pumping billions into the economy to boost back confident and bailout. The bailout is being felt around the world, Europe and Asia. UK and Europe Government has come out pumping billions to their banking systems. In the process, Government is now taking up stakes in financial institutions. Government in Asia have also come up to support and guarantee the banking system. What is happening here?

People all over are frustrated, in that their hard earned monies and savings have now been depleted. Stock Markets all over have also collapsed and wipe out billions. Against such backdrop, fuel prices have dropped to US72 per barrel which only recently saw it shot beyond US130 per barrel barely a month ago.

Quick and concerted action is required from all. Government in some countries have come out to guarantee the banking system and hopefully re-instill public confident that banking deposits are safe. Whatever action is required, it will be many many months before the world economy can regain its past glorious days.

I have just received this internet jokes that perhaps illustrate how greed can create chaos. I think the story has some resemblance to what the world is facing now. The story goes like this as follows;

If you have difficulty understanding the current world financial problem, the following should help;

Once upon a time in a village in India , a man announced to the villagers that he would buy monkeys for $10.

The villagers seeing there were many monkeys around, went out to the forest and started catching them.
The man bought thousands at $10, but, as the supply started to diminish, the villagers stopped their efforts. The man further announced that he would now buy at $20. This renewed the efforts of the villagers and they started catching monkeys again.

Soon the supply diminished even further and people started going back to their farms. The offer rate increased to $25 and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it!

The man now announced that he would buy monkeys at $50! However, since he had to go to the city on some business, his assistant would now act as buyer, on his behalf.

In the absence of the man, the assistant told the villagers: 'Look at all these monkeys in the big cage that the man has collected. I will sell them to you at $35 and when he returns from the city, you can sell them back to him for $50.'

The villagers squeezed together their savings and bought all the monkeys.

Then they never saw the man or his assistant again, only monkeys

I hope this helps to illustrate the present situation well.

Yours truly,
Ivan

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