Saturday, December 27, 2008

╠ Save the World, Embrace Christmas Reprise ╣

Most of you probably remember my AniBlog about the Global Economic Crisis. In this video I mentioned the way to solving this problem was simply to spend more and therefore embracing Christmas was the answer.

Now this is not entirely theory at least. If inflation goes up that doesn't mean all of a sudden problem solved. People simply spending money isn't going to fix the problems of the world such as the banks constant battle to stay afloat and the stock markets huge slump.

All inflation does is mask the problem to a degree. However there are follow on effects that work with this. People spending more means businesses are more successful and end up with more money. This means they don't have to fire people and the recession cycle hopefully begins to dissipate. So it solves a conventional recession. The fault with this though is if it happens it may not fix what we currently have. There are so many large businesses on breaking point so spending more may not be able to outweigh the losses if we were to say lose a bank, even if it weren't a big four bank.

So in essence it should help and certainly shouldn't hurt and when the alternative is to invest it in the stock market and lose money or in a fixed interest account and get a measly few percent then why not go for it! Spend, spend spend!

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