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Sunday, June 7, 2009

It’s All an Illusion


It's Magic!


The current worldwide economic crisis is affecting my generation to a greater extent than young people. We are all frightened of what is coming next, but my generation are truly shell shocked because at a time when we need to be able to rely on things that we’ve known all our lives to see us through to the grave, suddenly the sky is falling all around us.

The scope of the problem is so huge that I think in order to try and understand just how overwhelming we have to take one case at a time. We should use as an example a family that have been conservative all their lives. The breadwinner worked at one job throughout his entire life. He was loyal, never missed a day, was seen as a pillar of the company, and as a reflection of his faith and trust he bought the company shares that were offered him as a place of safekeeping for his savings that was for the retirement of he and his wife.

He might have been an employee of 152 year-old Lehman Bros, or any number of other firms of that nature that were household names. Just when he lay back to put up his feet and to enjoy his gold watch the absolutely unthinkable happened: Lehman Bros. disappeared from view as though it never existed. His savings has gone and he has no way of recovering. Unless he was wise and spread his risk that family will probably simply die of broken hearts and broken dreams. They will simply show up in the death notices as mature people who have simply come to the end of their lives. No drama!

More and more so I am seeing the landscape change in front of my eyes. I am sitting down to write this as the television talking heads are describing in detail the ramifications of the bankruptcy of General Motors that was filed today. This follows the bankruptcy of Chrysler motors. In effect, America has gone from being the most powerful economy in the world to being the beggar on the street in about ten years.

There was a time when the U.S. Dollar was the currency that everyone wanted and respected. Today, people are seriously talking about changing the dollar as a reserve currency to the euro. When the OPEC nations elect to price fuel in euros, that will signal the end of America’s role as the greatest nation on the face of the earth.

World leaders have long accepted America’s President as the most powerful man in the world, and that America was the dictator of how world communities should live. The high point of many leaders’ experience was their visit to The White House. Now that President Barack Obama is in office this is not the time to back away from that principle, however, it always has been a little over the top. We can’t all be Americans, nor do we all want to live as Americans do. The world is not wired like that, but to live in peace and harmony with our neighbours in democracy is not a bad thing.

Add to those things much needed stability. There are certain countries whose citizens are legend for not wanting to change their ways. They prefer to just go along doing things as they have always done, and they resist change with all their might. The promoters of the new way cannot understand why a person would actually choose to continue to do things that require more effort rather than to work smarter and easier. It’s all about what you understand. That’s why hardware stores still sell push mowers and hand scythes. When your bank manager was still at his or her desk fifty years on, that was a very good thing. There was trust, knowledge and stability between customer and banker. Now bank managers are rotated routinely and banks are mere institutions without hearts or soul. To add to that they have been at the forefront of making mistakes and helping their clients make mistakes. In one country the government has given banks the power to call in their mortgage clients, to whom they gave a mortgage of more than 100%. Now they require more collateral from the client. Like what do they have in mind?

Yes Chicken Little, the sky is falling. There is nothing that is certain other than death and taxes. Many of my generation did not believe in God, but they did believe in General Motors and Lehman Bros. Now what?

Copyright © 2009 Eugene Carmichael