Tuesday, November 1, 2011

How To Remain Hopeful in the Midst of the Worst Financial Crisis Since the Great Depression Part II (1)

By Miriam B. Medina

At the end of part one of this ongoing three-part series, I asked some tough questions as to how do we remain hopeful in the New Year in the midst of such difficult economic times? How do we dig ourselves out of this economic hole, a once in a lifetime economic hole, and keep our motivation? Who cares about setting New Years resolutions when you're filled with dread as to what the future holds for you? Will you have a job? A home? How can you afford to buy Christmas presents when you are struggling with the rent? In parts two and three of this three-part series, I intend to do my best to find an answer to these questions, so perhaps we can all remain hopeful as this economic nightmare plays itself out.

First and foremost, there are no quick solutions to such a massive problem, nor is there a magic wand that we can wave to stabilize the national and global economy. 'Abra-Cadabra, bring us back our jobs, our homes and Hocus Pocus... restore our financial well being!' No, sadly it doesn't work that way.

So in response to this devastating economic crisis, what can we do?

What we need to do above all as Americans is to have faith, faith in God and faith in our capacity to deal with and beat each problem that confronts us because we've done so for 234 years. The United States has passed through several significant financial crises, such as the ones in 1815, 1819, 1837, 1857, 1869, 1873, 1893, 1901 and 1907. Those are normal small economic corrections. Simply put, the mild bad times to correct the good ones previous to them. Everything that goes up must come down. It's a rule that applies to economics as well as gravity. Then there were the exceptions to the rule in 1837, 1893 and 1929. These years were defined as "serious depressions" because of the magnitude and duration of the collapses. Some attribute these panics to over-expansion and overages of debt, overextended notes and discounts, over inflated investments and falling prices, etc.

Where we sit is as yet to be determined, but it appears that, when all is said and done, this massive crisis will be an exception to the rule.

The Roaring Twenties were prosperous, happy-go-lucky years, where Americans spent money recklessly, drinking it down with two fists as they partied like crazy in speakeasies, rebelliously defying Prohibition and casting all care, and their money, to the wind. They had money to burn, or so they thought. It was a remarkable, exciting period in all of its aspects. "America was enjoying an era of great prosperity." Economic growth created successful business profits which in turn raised the standard of living for most Americans.

By 1928, everyone was singing praises to the glory days of America. It was a time when American businessmen and economists felt overly confident that the erratic fluctuations in the business cycle were finally under control. They were blindly unaware to the terrible sense of foreboding of an impending doom that was looming over the nation like a black cloud. Little did they know at the time, that this would be a rude awakening for the "American Dream" itself, and they were not prepared for the nightmare that was about to replace that dream.

On Wall Street, you would find the most exciting and keen intelligence in the country, and that mind trust would create a hazardous condition that would impact the world's economic foundation. As speculation and trading spiraled out of control, no one knew from one week to the next whether they would become a beggar or a millionaire. While one man made a fortune from a sudden increase in stocks or gold, one thousand would be instantly ruined. Even the soundest and most established firms fell with a thud, toppled by these sudden reverses. The image of these once powerful, self-confident, rich men walking briskly to and from their desks, painfully waiting to see how the money they controlled would fair in the stock pits was more and more replaced by expressions of nervous agony and cries of despair as their whole world crumbled under the force of economic volatility. Many of these failures were attributed to stock speculations, business deals gone wrong and lavish lifestyles led by brokers and CEO's. Sound familiar? Unable to cope with their losses, some suffered nervous breakdowns, heart attacks, or flung themselves from their offices to their deaths, leaving their families financially ruined.

To be continued: Part II (2)

To Contact: miriammedina@earthlink.net

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