An amateur economist's muse

From time immemorial, we have heard 'what goes up must come down’. But why did we fail to remember this when we were caught in the trap of excessive consumerism, when money just came by, when everyone had access to loans, when everyone started talking about the real estate boom?

When greed took over reason, when people failed to see beyond the rising property prices and the investment tools, which yielded quick returns, when money, money and more money became the mantra people refused to accept the fact that good times do not last forever.

The blind faith that real estate prices will always rise, now has the whole world in shambles.

Job-cuts, salary cuts, unemployment, fall in income, decrease in consumption and decline in demand resulting in a fall in supply and production levels. How far can the production levels be cut for the dire need of sustaining oneself? Where is the world headed???

Gone are the days when flaunting a placement offer from a big shot MNC was the in-thing. Figures like 18 lakh p.a, 22 lakh p.a etc are soon going to be fancy figures as it once used to be. Luxurious flats, fancy cars, numerous investments I made and speculated on, spending lavishly which now I have come to accept as wasteful spending, almost nil savings, my dreams of leading a happy life has come crashing down. Very soon, we will get to hear people saying these lines repeatedly. Uncertainty has now become a gripping fear. Its a 'here today nowhere tomorrow' situation.

Now the whole world is running helter-skelter trying to figure out who to blame? The investors who fell for the trap? People who wished to make quick profits. The investment banks that bought the home loans and sold them in the share market? The banks who were lured into providing more loans to the common man without even bothering for an income proof? ( NINA oru VINA ayallo dhaivame) The loan defaulters who on the first place were forced upon these loans? The Fed Res chairman who held a strong belief in free market mechanism? Unregulated markets? Or that brilliant person whoever came up with the idea of Catastrophic Deceptive Ornaments oops, Collateral Debt Obligations which promised so much money in a short period of time and is now said to have brought the world to the brink of an economic holocaust?

What I fail to understand is that after every such turmoil, we have people coming up and saying we had predicted this, we knew this would happen etc.. But why wasn't anything said and done when these predictions were actually made? Well, something like people failing to pay the loans back was obvious... But why was this overlooked?

Nevertheless, the inherent truth we need to accept is... It was just pure greed for money and that too easy money! Add to it excessive speculation and utter foolishness. Irrepressible consequences that were once predicted to be the result of a third world war need not necessarily be so anymore . Now my dear people, is the time that we will revert to simple living with hard earned money and stop building castles in the air!