The United States is reported to be going under a recession and even most regions of the world too are being pulled into it owing to globalization. In fact, it may be said that this is an unprecedented event for the majority of the people worldwide, as they have not seen anything like this during their lifetime. People are actually observing, what may be described as a secular turmoil, which would usher in a massive change in their convictions, principles as well as in their way of life. According to many, currently there isn't any word or term that can describe the situation appropriately since what is happening is something that is over and above an economic depression. As of now, perhaps the term reconstruction can serve to describe the present situation.
The term reconstruction is a very familiar word denoting restructuring or reinstating taking the old and transforming them in something novel. The birth of the new restoration will be due to the culmination of the cheap credit - the means of support for the United States economy for some time now as well as the stipulation that people always emphasize on anything that is superior. In fact, the phases of the end of the old system can already be witnessed everywhere while greediness surrenders to apprehension and ecstasy changes into fright.
The ensuing reconstruction would ascend from the prevailing devastation after some time. However, currently people all around are witnessing successive waves of economic collapse everywhere. Homeowners in the United States are disposing of their residential real estates as well as their mortgages owing to declining prices of homes. At the same time, blazing sales prices on foreclosed homes are propelling the costs to plunge more steeply. Several consumers are turning out to be defaulter being unable to repay their loans taken against their credit cards and cars. As a result, banks are being compelled to retract from sanctioning any further loans. The commercial real estate market is spiraling further downhill owing to all such happenings. Plunging prices of stocks are an indication of the obliteration of hope for a happier and more fruitful financial future. In other words, the alarm prevailing on the Wall Street is defeating businesses on Main Street, thereby herald much more panic on the Wall Street.
At the moment, it is a rancorous downward plummeting. High rates of unemployment and an intense financial adversity has descended on millions of people in the United States. Several investors are enduring reeling losses and much more damage appears to be imminent. Devaluation and declining prices that manifest reduced demand is likely to aggravate the soreness as well as lengthen the downward swirl.
All news regarding the bail out of the United States is nothing but a funny story. In fact, the plans of the government to purchase and subsequently resell making a profit are simply of no value, or else there would have been a market for such things and there would already be a host of buyers in the market. Even as the government has been endeavouring to support the banks to ensure that they should not collapse and the prices of stocks should not plummet, it will itself be defeated by their burden. Precisely speaking, the attitude is extremely gloomy, but such an obscurity is simply the kind of setting wherein a new day breaks bringing along all the light.
Reconstruction will commence gradually from the ashes of all such devastation. Truly speaking, such a huge fall can only be experienced by the strong and powerful. And America is not only mighty, but still the store house of all resources and knowledge. In fact, time and again the Americans have done the right thing at the right time and it is expected that this time also they will be able to get their act together once more.
It is important to note that when people would stop describing or evaluating them by their wealth, they would become free to identify themselves by their thoughts principles and beliefs. It is also true that when people would no longer require impressing one another by what they possess, they themselves would become notable by who they actually are and what they are able to do. In brief, when people quit the habit of placing their possessions before them, they will be able to commence a new practice of putting people first.
It is possible for the Americans to give up their anti-depressants and be a merrier lot when they are able to replace their greed by admiration and positive reception. At the same time, they need to give up the notion that it is an entertainment to have people admire what they have and begin to perceive the situation as an opportunity to be with people whom they care and exchange authentic thoughts and ideas. This way, the Americans can once more be drawn in the commentary of life. When people can liberate themselves from their never-ending chase for further money and wealth, they are also able to be ideal parents to their children enabling their offspring to lead a life that is emotionally healthy as well as productive. While they can then educate their children regarding the right manners and respect for others, while themselves try to learn as well as be respectful and well-mannered. In fact, in the present day world, people have begun using their possessions as a weapon to identify themselves against one another. Therefore, when people are bereft of such possessions, they would be free to approach one another as equals.
When people's energy is liberated from attempting to go beyond one another there is no limit to opportunities to become original, ingenious as well as creative. At the same time, when people are able to replace their wanton expenditures by cautious saving, they would be required to bring out their mental powers and resourcefulness out of storage and utilize them once again. In such situations, people would be required to be inventive as well as creative in their routine life and also their work places. In fact, people would have sufficient time to devote to insight and compassion when they stop being senseless customers. When people are able to attain this state in their lives, all they possess would once more turn out to be significant as things that need to be valued and appreciated, instead of something that would become worthless and eventually have to be discarded.
All around us, we can see several evidences of the fact that nature detests anything that is in excess. Therefore, when people actually discard everything that they have in excess they are able to be one with nature and also enjoy the benefits of this unification. As a result, the mental and physical health of people would be restored in its normal condition. Once again, they would be able to walk on the earth and experience the feeling of being empowered by the plain fact that they exist. The time when people would no longer feel overwhelmed by the gleam of their neighbour's car, they can once more perceive the splendour of a sunset, a baby bird or a wood. In the present day world, which is witnessing a failing financial system, people continuously feel bad since there is always another person who owns a bigger house or a superior car compared to those possessed by them. In a new fiscal system where teamwork and aptitude are the basic rules, it is possible for any individual to attain just about a constant feedback that is mostly positive.
To be precise, currently America is in the destructive stage that we discussed above. In fact, prior to the commencement of the reconstruction phase in true sense, it is essential that all that is old and worthless is destroyed entirely. Presently, it is important for the people to mull over the manner in which will help them to endure the destruction phase with the intention of having adequate resources left with them to commence the reconstruction. In fact, it is important for the people to be aware of the extensiveness of the collapse as well as the opportunities it presents before them. It may be noted that the United States is yet confronted with failures of the banks on an enormous level. It has been learnt that the Federal Deposit Insurance Corporation (FDIC) has prepared a catalog of banks that are in distress along with approximately 150 organizations from which the depositors ought to be saved. Interestingly enough, the amount required to rescue such depositors is a whopping $80 billion. In may be noted that when the FDIC had released the list of the banks and financial institutions that were susceptible to failures, it did not comprise the names of the major banks that have either already collapsed or merged with other banks with the corporation's help.
Presently, there are precisely more than 1,000 financial institutions that still face the risk of failure involving assets worth over several trillion dollars - this amount actually surpasses the budget of the Federal Deposit Insurance Corporation by far. In such a situation, the best and only way for people to safeguard them financially is by closely preserving the assets that have conventionally been regarded as store houses of value during critical times. While gold tops the list of such assets, the other items include farmlands as well as other commodities which are indispensible for people - in other words, things that are essential as well as most valuable in everyone's daily life. In fact, the value of such kind of hard assets may also fall during the deflation or depression that is looming large. Nevertheless, they are important since the fall in their value is much less compared to other assets - money or wealth.
Although the federal government has informed the people of America that their problems would be solved by the bail out, in reality, the bail out the government has been talking about would hardly provide any relief to the people. Many have described the government's proposed bail out is much less compared to even the tip of an iceberg. For instance, the bail out does not take account of any of the expenses towards rescuing entities such as Freddie Mac and Fannie Mae as well as other units sponsored by the government and are in bad debts. In addition, the bail out also does not include or address the loan portfolios of Fannie Mae and Freddie Mac that have been failing continuously.
It may be mentioned here that the commercial real estate will experience a harsh reality similar to what has been endured by the owners of residential real estate. It is only a matter of time and things will start hitting when the consumers get the actual picture. Moreover, a time will come when the consumers would not be able to pay the least amount on their credit card loans and, in such a situation, the issuers of the debts would also be seeking a bail out.
There are several people who have genuinely made efforts to remain up-to-date as far as their mortgage payments are concerned. However, when such people lose their jobs, they too would be unable to repay their mortgage loans and turn defaulters. When this happens, there will be more houses on the market resulting in a further fall in the price of residential real estate - the houses would then come at very inexpensive prices. While the prices of the residential property will keep falling further, no one will receive any incentive to pay for their mortgage. The reason for this is simple, and then their houses will have a lesser value compared to the amount they owe for their mortgage.
Now, the moot question is whether it is possible for the government to keep on bailing out any and everybody while the economic situation continues to deteriorate? The answer to this question is simple. It is quite evident that this is not possible because the people who would be out of employment would no longer be in a position to pay their taxes. And this is certainly not going to contribute to the government's tax base.
In addition to these issues, the United States already has a plagiaristic market that is to the tune of $180 trillion! Over the past several years, financial prodigies have contrived multifaceted and intricate financial instruments which are comprehensible only to a few. Despite this, several people have made endowments in such financial instruments and all this still remains to be undone.
In fact, the market experts have already announced that no matter how and to what extent the government intervenes into this situation, nothing is going to salvage the old system. The old system has truly decayed to its core. What is apparent from the ongoing is that the markets are determined to overthrow the existing system irrespective of the government's actions. In fact, the decision of the markets will facilitate in accelerating the destructive phase and ushering in the reconstruction.
If you want to draw any parallel with the ongoing destructive phase, you may describe it a massive group detox process. Even as the body is getting rid of all the toxins and poisonous substances, it undergoes countless tempests and anguish. However, when everything is over and done, all of us will be feeling much better and happy.