Problems and Solutions to the current economic crisis the world over
 

[B][SIZE="6"][COLOR="Blue"]Problems and Solutions to the current economic crisis the world over.[/COLOR][/SIZE][/B]


The problem which the economy across the globe is facing is really massive.No one really expected this could happen in such a mssaive way which has left the major biggies like UBS,LloydsTSB,Royal Bank of Scotland,Halifax Bank of Scotland,GoldMan Sachs,Citibank etc to name a few writing off billions of dollars from their bad debts being lent as a part of their mortgage lending in USA.

USA is a 14 trillion dollar economy which is 14 times greater than our economy.So you should know the effect that it would have when some thing goes wrong in their financial system which is why when the current crisis was pegged at USD1.2 Trillion,in US alone the Govt and their Federal Reserve has to announce a package of USD700 Billion.

We saw some of the major biggies filing for bankruptcy like Washington Mutual,Lehman Brothers etc which have so far build their massive empire across the globe for decades and even the World's Biggest insurer AIG(American International Group)has to ask for just USD85 billion to survive though it had assets under its umbrella

which is more than USD 1 trillion(that is the size of entire Indian Economy) and some of the other biggies have to approach other wealthy investors for help which was turned down by them for their irresponsibility which is why when Lehman Bros approaches Legendary Investor Warren Buffet for just USD5 billion,he turned down and invested in their rival Goldman Sachs because he knows the future of his investment.The cry for help from Lehman Bros was turned down by Govt of US and also by Saudi Investment Authority which now has decided to invest almost USD7.5 billion in Barclays which is one of the biggest banks in the US.

The effect this financial crisis created was so massive that even the PETROL which had direct effect all these says with regards to the pricing of GOLD and other essential commodities like Rice,Wheat,Edible Oils vanished. Even though the petrol price is well below USD70 per barrel,it is still not enough to control the prices because the economy of major countries were already sinking.Even at these prices Indian Govt couldnt afford to reduce the price of petrol because the loss of all oil companies put together even after the reduction in price is 120,000 Crores and the burden is really too much to bear because our inflation rate is also more than 10%.

We have seen major banks came to the streets for a throw away price and was acquired by other banks which could sustain this situation because they acted responsibly.If we start discussing about this in detail,it would run for hundreds of pages and for which a book only needs to be published.So,we would come to the solution now..



[B][SIZE="5"]Solutions. . . . . [/SIZE][/B]
[LIST][*]1) Be a regular investor.Dont be greedy expecting higher interest which is why thousands of investors in UK and Eurpoean Union have lost millions of dollars since they invested in Icelandic banks like Nordic Bank and Santander which had gone bust during this financial crisis.

[*]2) Banks should be a responsible lenders.When they are vigilant in growing economies like India,they whould follow the same guidelines even in developed economies where they should verify the credibility of the borrower because the money is given to them as Personal Loans and Mortgages.

[*]3) Govt in the respective countries should make a thorough audit on their respective country's banks to make sure that thay are stable because by the end of the day the banks form the backbone of the economy.

[*]4) Govt and Central banks of other countries have already reduced their Base Rates,CRR,Repo rates which should continue for a while till the situation improves.

[*]5) Salary of the top executives in the banks should have a ceiling because there is no use in paying these people when their respective organisation is running in major loss.

[*]6) If possible all the banks in all the countries should be nationalised which would make sure that nothing goes wrong and everything is stable.

[*]7) The borrowers should also act responsibly.Just because a lending option is available,one whouldnt go for it and later comes to a position where they couldnt afford to pay it.[/LIST]

We all should act together to bring back our economy because "One hand makes no sound". Let us all Unite and bring up ourselves and our fellow members to the place where we were before.


Spesal thanks to Mr.S.SarathBabu