Credit Crunch or Absolute Abundance?
by We hear a lot about the credit crunch, but what does it actually mean? How real is it? Is there a way out?
Is the so-called “credit crunch” a little exaggerated or is there really cause for alarm?
This article examines some of the apparent truths to do with the credit crunch but also suggests that their is more to it than meets the eye.
Some Unfortunate Truths
There is a problem, that much is clear. It is harder to get a mortgage now. There are more home repossessions than ever, prices are escalating worldwide, apart from in housing, where they’re tumbling and more and more people are feeling the pinch.
It all started, they say, with problems in the “sub-prime” mortgage market in the States. People who really couldn’t afford mortgages were given them and defaulted on their payments. This had a snowball effect on other markets.
So, the banks run out of money. They start to put the squeeze on their customers, reducing their spending power, which slows everything down.
Bankruptcies are forced, so debts are not actually repaid. Firms go under and even if they sell up before they go bust, it’s just putting the problem in another space. Homes are repossessed, but who is going to buy them as you can’t get a mortgage these days? The money gets stuck.
It looks grim, but if we unpick it a bit, it looks better.
Blame it on Oil
Why shouldn’t the less wealthy own their own homes? It creates a healthy self-interest. What has probably scuppered them more than anything else is the rise in the cost of living. Which has been been caused to a large extent by the rise in the cost of transport. Even a giant like British Airways is in trouble because they’re currently paying far too much for aviation fuel.
If petrol goes up, everything goes up. Here’s a thought. Why are we still using oil? There are plenty of alternatives. A counter argument is often that it costs more to develop the alternatives than it does to carry on using the same old tools. Not in the long run, it doesn’t. Plus, by using something other than fossil fuels we might also tackle another 21st Century problem.
We ought to remember that electricity is actually a very efficient way of converting energy. You just find the best possible way at the time of making it. Burn a little oil for a few years, use natural gas for another few, whilst it’s there, and what about all the sunshine on the plain in Spain? The Atlantic waves? The autumn winds?
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