At long last the American people, from the pauper to the President, have admitted there are very serious faults in their financial system.
I have long marvelled at the average American citizens ability to remain totally unaware of what was happening in the financial world. I suppose when you get out of bed – go to work – have breakfast at the roach-coach – stop off at Denny’s for your evening meal – then go home and watch the baseball channel or the car racing channel or the porno channel, it is inevitable that important events would pass you by.
Well let me assure you – everybody in America is now aware of the serious problems facing the financial system. For the first time in my experience, travelling in the USA, I saw the average American becoming aware of the big picture.
On previous trips to the States, when they found out what I did for a living, people would say “I’m not involved in the money and investment market.” I would say then, what are you doing about providing for retirement?” and they would say they had a 401K account or some other super scheme. They simply never related their retirement schemes with the financial market.
Now all Americans realise that last week, the financial system in their country was on the verge of a catastrophic collapse. The world as they knew it, was no more. Their lives were changed forever.
Share prices were crumbling, the banking system was collapsing, and the country’s wealth was disappearing before their eyes.
The government had to, at last, act and they did. Bush announced a bail-out package that will cost the American taxpayers upwards of a trillion dollars
This essential package prevented the collapse of the financial system but it will not solve all of America’s problems. Rather, it will spread today’s problems over generations to come.
The stories of greed and stupidity by executives earning millions of dollars per year are simply amazing. Some unbelievable. My only hope is that the pendulum doesn’t swing too far. That we don’t see everyone going to ground and money not changing hands. Then we really will be in trouble.
In the meantime for investors, it’s a case of sitting tight, riding out the storm, and seeking good advice from experienced professionals with a sound track record.
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