Have We Learnt Our Lesson Or Are We Heading For Another Crash?
The financial crash in 2008 caused panic and terror amongst the financial sector. The biggest fear was a complete financial meltdown which would have a knock on effect on other industries.
Why would a financial meltdown cause so much damage?
We live in a world where near enough everyone (including government organisations and businesses) has a bank account. Most people only possess a minimal amount of actual physical cash.
If the financial industry collapses, then this means all account would be frozen. Nobody would be able to withdraw any money; we would be unable to pay for anything. The whole system would be at a standstill.
Why did the crash happen?
The whole financial industry relies on selling various types of debts (or IOUs) in order to make a profit. The debts get passed around until someone cannot pay. If enough people are unable to pay their debts then the whole system collapses.
Since the financial industry is the countries main source of income, a collapse in the industry means that no money is generated.
Will another crash happen?
The government have made changes to how the banks are regulated and who/ how much money they can lend to people. However, if these changes are enough still remains to be seen.
The media cannot seem to make up their minds if we are on the road to recovery or not. Articles published are often vague, confusing, and contradictory. Financial experts however feel that the system is set up so that it will constantly fail and then recover. In order to prevent another crash we would need to dramatically change the system or introduce another source of income.
Could we change the financial system?
In order to change the system we would essentially have to change the way we think about money and power. The system is essentially designed to maximise profit for those at the top. We would need to invent a system with distributes wealth equally.
It may be possible, but it is unlikely to happen.
Could we create another source of income?
We used to generate a lot of income from making goods and then trading them with other countries. However, items can now be produced elsewhere in countries where resources and manpower are considerably cheaper.
We do not make many goods in this country anymore because it is not cost effective. The farming industry is struggling because cooperation want more goods but for a fraction of the price.
In order for us to find another source of income we would, once again, have to change our attitudes towards money.
So, is it possible to prevent another crash?
Quite simply, no it’s not possible. We have created a system in which we are essentially reliant on. In order for things to change we would have to be prepared to spectacularly change the way we think. We would be reliant on others to relinquish their money and power in order to create a fairer system.
As unfair as it may be, no one can realistically expect anyone to just give away their money.