2008 will be a stormy year for the global economy. There will be a slow down. That's a fact. It used to be that, in the past, it is the small boys who make mistakes but the big boys will take over to neutralize the effect. This year, however, it's the big boys making the mess. The credit crunch that happened in the housing market of the United States proved to be cancerous as it affected other major industries in that nation like banking and construction, which effectively affected the whole world.
Because it is the number one trading partner of many nations around the globe, there is actually an insightful joke that says that whenever Uncle Sam sneezes, other nations catch cold. True enough, a general slowdown is bound to occur, buoyed by strong growth in East and Southeast Asia, led by Chindia and Vietnam.
So what is the whole point? You probably are an ordinary citizen. What can you do to mitigate the effects of this global turmoil? As an ordinary consumer, you still can do something, albeit it won't be felt if you are the only one who'll do it. The key to prevent future credit crunches is to spend only what you have. That is the problem. We tend to spend more than what we have, putting ourselves in debt. This is the lesson we should all learn. We should learn how to keep track of our investments. Make a budget if you must. These little things will go a long way to help the economy survive the impending recession.
In the United States, the bubble has erupted. But it seems that we never learn. Because of the housing boom in China, subprime lending is all over. People who are not qualified to make a loan would falsify documents in order to pass. So will China be another United States in the future? Find out in the next episode a few decades later.
All UPSable
