Everyday, the headlines scream at us about the ongoing financial crisis. They are gripping as well as scary; economists can never agree and even change their own opinions & remedies to the problems like fickle weather! This famous quote is attributed to Churchill – if you put two economists in a room, you get two opinions unless one of them is Lord Keynes, in which case you get three opinions! The position hasn’t changed with the passage of years. We are facing recession after recovery, one after another by the minute!
The whole world is now engaged in blame games and holier than thou posturing. We are blaming each other for our dire predicament that straddles the entire gamut of society’s fabric. We are unable to get out of a deep hole, and unwilling to take necessary steps and sacrifices.
A quote from Hamlet is ever relevant – Neither a borrower nor a lender be; for loan oft loses both itself and friend. Both debtors and creditors were kicking the can down the road and the end of the road was supposed to be light years away! But it is nigh and we face the stark reality to right the wrongs here and now; forced to put out the fires set by us only, within one generation. With transactions happening at the click of buttons involving billions, the comeuppance is also faster!
The partying went on unhindered when the music played on but it had to come to a halt sooner than later. The borrowers thought they had a good time as also the lenders. Just like the well-packaged high risk loans into financial derivatives was sold and resold, the Euro zone masked the failings of some of them to adhere to financial discipline. Their single currency, Euro, was supposed to take care of all! But the crack lines are too visible to hold them together anymore.
China was also only too pleased to ply developed countries with cheap goods based also on an artificially held-down currency to get further leverage on the markets. They ran up huge surpluses on their trade with others which was clearly not based on firm fundamentals. It was sure to give way. Now, the jury is still out, who is more worried – the debtor America or the creditor China. Again, an age-old truth is relevant. Borrow small, the debtor is in trouble; borrow big, it is problem of the creditor!
The issues originated when countries took the easy out and against fundamentals. Balancing the budget and trade should be the goal unless we believe in a higher force to help us out. Some look up to increased visitations from the UFOs. They seem to take more interest in us, originating from a far way galaxy! They sent robots for the time being, while the real ones stay in mother ships, and travel through black holes to visit us in a jiffy!
It is easy to get into a mess but to get out of the hole is proving tough. It is as it should be; we need to pay for our follies not to repeat them. At the end of the day, there are no free lunches; we need to earn our keep. Back to some basics; that we need to produce real stuff and the best have to be involved in them based on unity of purpose. The blame games that go on forever are also coming to head, reaching the end of the road; the solutions have to start from each of us to make a real impression. The time starts now!