Dallas Auditor .com

If you are someone who has been listening to the news about the Global Financial Crisis for the past year or so, you are probably a little bored with some of the often repetitive gloom.

If your employer downsized at the beginning of the crisis, imagine the pain and fear you would be experiencing if you had remained unemployed. The news would be analysed daily for any scrap of good news.

The good news is that many long-term unemployed are still maintaining a brave face, and often find it possible to laugh at adversity.

I have friends in this situation with whom I discuss home business opportunities. Most remain convinced that the continuing growth in China will restore normal commercial operation soon. It is an almost classic case of denial.

I have 2 questions: What is the “Balance”? And if the Chinese can, why would they help everyone out?

Well no-one knows what normal is any-more, and what with the Chinese experiencing their own inflationary pressures, their growth WILL be curtailed.

Here is what is supposed to be happening. Most countries borrow from China to fund their deficits, so that they pass funds to the lending institutions for business loans, interest payments back to the banks, and for “big boys toys.”

But the lenders aren’t stupid. They sit on the money, albeit making plenty of noise about now being able to fund loans, but the reality is, the lenders have lost money, and they stockpile cash for emergencies.

How stupid would they be to lend out money, when it will be needed to fund their own liabilities. Because property that has fallen in value by up to half, or shares that have done the same, will not cover the funding requirements.

A miracle of sorts would be required, the mega rich get out of their ivory towers and help combat the poverty and the pain that the under and unemployed are struggling to cope with.

What we need to do is fund education and training for those who have not been able to find employment, assisting those who through lack of knowledge or opportunity are unable to assist themselves.

This means that real jobs will be created, where necessary for public works, or infrastructure, in public housing where required, and in occupations that are more then just services for entertainment and leisure.

According to Alan Greenspan in his comments to the Wall Street Journal, credit risk for the US is not a problem as the US Government can print more money at will. But he repeated that a real risk is Interest rate increases.

The US interest rates are still at near zero. But remember, (I can, but I am a boomer) in 1979/80 over the space of 4 months, the effective rates of interest increased by 4%. The prime rate charged by the banks was 15.6%.

Debt as a percentage of the GDP rose from 38% in June 08 to 59% in June 2010. How much more can this increase with out substantial movement in interest rates? I am not trying to frighten anyone, but we need to look at the facts.

Inflation will arrive soon. It will be brutal. The goal for everyone should be to protect themselves from inflationary pressure on income and expenses. We all need to Recession proof our lives.

If this makes sense to you, see Don’s Blog, or see his primary website. You will find many hints and suggestions for business.