The Ultra Rich Getting Richer
According to Senator Bernie Sanders (D-Vermont) who was interviewed on the Thom Hartman Radio Show on Air America (9/26), during the Bush administration 400 of the richest Americans increased this wealth by a total of $670 Billion. That’s an astounding concentration of wealth.
The news is not all good for the uber-rich because the value of their assets are decreasing during the current economic crisis. But their lifestyles probably won’t be affected.
The people most affected by the market downturn are apparently those who are retired or nearing retirement who depend on their market holdings as a base for their reitrement income. Some have to go back to work, others who don’t have that option, are scared and struggling.
There’s no way of knowing if the rescue package is going to stabalize the market or not. Clearly traders are jittery. And because the financial crisis is global, no one can predict the eventual outcome.
I heard a quote yesterday (don’t know who said it)–Everything is going to be ok in the end, and if it’s not ok then it’s not the end. We’ve got a long way to go until the end.
In the meantime, we can’t wait for someone to save us. It’s up to us to educate ourselves about the financial world and develop stellar financial management skills. Doing this can help us straighten out our own finances and make rational financial decisions for ourselves.
If, Instead of giving into the fear you take action, you can find your own way out of your fianncial mess, if you have one. Count your money, don’t use credit, create a rational spending plan, cut back on non-essentials, work with othes to find local solutions.
Personally, I think that it is important, at this time, to get beyond the fear and spend time being still so you can let your intuition be your guide. Times are tough for many, and we all have the opportunity to come out of this stronger, wiser, and much better at managing our finances.
It’s also crucial that you understand the economic policies of the presidential candidates. Find out who their economic advisors are and what they believe are the solutions. It’s the advisors who will affect the judgement of the person who is going to be in charge. Paul Krugman has an excellent column on this topic.
Should We Bail Out AIG?
When the administration tries to rush something through congress, I worry. I also get a queezy feeling about the huge bailout that is being proposed.
The numbers are staggering, so much so that it defies comprehension. Our national debt ceiling will be rased to $11.3 TRILLION dollars. The bailout will cost $700 BILLION dollars. Maybe. It could be more, and there’s no guarantee that the plan will work. So far, the proposed bill doesn’t offer relief for homeowners.
I highly respect the opinions of economicst and NY Times columnist Paul krugman. He has an excellent column today called Cash for Trash that I recommend if you’d like a more sober view of what is going on.
The Good News Hiding in the Bad news
It sure does look like the financial world is falling apart. Major financial institutions are going bankrupt, smaller banks are in danger of closing, government bailouts are taking place, and the words “recession” and “depression” on everyone’s lips.
The immediate threat seems to be a serious tightening of credit, which would affect consumer spending. This in turn would hurt the US economy. At the same time, the problems in the US are affecting economies around the world.
So what’s the good news? This financial crisis has been a long time in coming as regulations were eliminated or not enforced, and greed took over. Those out for the big bucks made risky investments, and the more they got away with, the more risk they took. Then it all started to collapse as securities backed by subprime mortgages went bad.
Here’s the good news: I see the current situation as a major correction as the greed and corruption come to the surface, which will allow the system can start healing itself. The dysfunction goes very deep, so it could be a lengthy healing, but it will heal. And the system that emerges will be stronger–until greed and corruption take over once again. But that will be years in the future.
Should you be afraid? No. And you can minimize your fear if take steps to protect yourself.
- Do everything you can to reduce your debt and cut down on spending.
- Downsize if you have to in order to feel more secure.
- If you can’t stop spending or you keep living on the edge, find out why you hold on to these habits.
- Think through all of your purchases and ask, “Do I really need this?”
- Keep making plans for a positive future and developing strategies for income building.
We are in the down side of a cycle, that WILL turn around in time. The people at the top don’t want the whole system to collapse and will do what they can to save it. It’s going to take a while, because the problem is global. This is a good time to find your place of peace in the midst of the chaos.
In the meantime, this is an opportunity for you to clean up your money mess and prepare for prosperity.
The first month of the six-month Build Your Money Muscles for Financial Strength & Security program has an audio, Overcoming Financial Fear, that can help you get yourself out of fear and into positive action.
Credit Card Reform
There’s some really good news on the horizon as the Federal Reserve proposes a series of reforms for credit cards and overdraft services that will definitely help consumers.
Highlights of the reforms include
- Banks would be prohibited from increasing the rate on a pre-existing credit card balance (except under limited circumstances) and must allow the consumer to pay off that balance over a reasonable period of time.
Continue reading
Subscribe to our blog
Click to
subscribe in a reader
Coaching Program
Let's Connect!