The economic crisis.

#1
The world wide bru ha ha about money and stuff, we all know about it and we have all heard the big fancy words used to explain it all away.
Now imagine having to explain it to a ten year old.....any takers?
 

Wordsmith

LE
Book Reviewer
#2
Lots of nations have lived a life they can't afford and have maxed out their credit cards. They can no longer pay back even the minimum monthly payment because they don't earn enough money to do so. They are heading for bankruptcy.

Both the nations that lent the money and the nations that borrowed it are trying to pretend there isn't a problem with the maxed out credit cards because if things go tits up, the consequences for the credit card industry are going to be dire.

The politicians are saying the problems with the maxed out credit cards are nothing to do with us. Many nations are asking for new credit cards so they can keep on spending without worrying about the debts on the old ones.

Wordsmith
 
#3
When Mummys and Daddys love each other very much they go shopping.
When they haven't got any money, nice people called 'bankers' used to let them buy things using other peoples money.
The bankers were very silly, and let Mummy and Daddy buy too many things with other people's money.
Now there isn't any money left, the bankers want it back, and that's why we haven't got a house any more.

And thats why you, little Cheryl-Cole and little Akeesha are going to have to be what's called 'Child prostitutes' so that Mummy and Daddy can keep on buying things.
 
#5
You know Jack And The Beanstalk? Well the feckin beans didn't work and the giant ate daddy's Merc, his pension and your college fund. Now get back out on that street corner, daddy's running low on fag money.
 
#6
Timmy lent you 3 marbles and you promised promised to pay him back 4. You now find you can't pay Timmy back. Timmy borrowed his marbles from Big Tommy whose now going to kick seven shades of shite out of you. You'll say you didn't know they were Big Tommy's and that you thought they were Timmy's whose a pussy so it's not your fault. You'll then continue to live with Mummy and Daddy and be a drain on their economy you little shite. It's not even as if we can put you on the game like your sister (0113 238 2035).
 

Wordsmith

LE
Book Reviewer
#7
EU version.

There is something called money. If you put it into a bank, clever people called bankers can make it seem as if there is twice as much of it as there is. Politicians like spending money. They will spend three times as much of it as there is.

Money is magic. It never runs out, so European countries can keep on spending more and more of it without worrying about the consequences.

Wordsmith
 
#8
"Shut up and suck. I'm paying for this, you know!"

If it's been sent from my HTC Sensation using Tapatalk then I'm probably pissed.
 
#9
The German children's bedtime version:

Once upon a time in Euroland there was a happy Leopard tank called Rolf who had been made by hard working Germans like Mummy and Daddy.

Rolf got sold to a lazy Greek who borrowed money to pay for him off a generous German banker, Friendly Fritz from Frankfurt. Rolf found out this had happened to many little Leopard tanks and what is worse the lazy Greek only had one olive tree and could never pay Friendly Fritz who was sad.

Friendly Fritz told the lazy Greek he should implement "austerity" and cut down his olive tree to sell for firewood, Friendly Fritz even offered the lazy Greek more money to buy more little Leopard tanks. But the lazy Greek just sat under his tree watching the olives rippen. This made Friendly Fritz very sad.

One day the lazy Greek said something about "unsustainable trade imbalances" and Rolf was so angry he squashed the nasty man and his tree so flat they were just a big greasy stain. And then Rolf and all the little Leopard tanks invaded Turkey and squished more lazy people flat. And they all lived happily ever after.

The End.
 

Alsacien

MIA
Moderator
#11
Thanks everyone.The kid's now understand.I however am a still confused.Can anyone explain it to a 51 year old?
The removal of regulation by a short sighted government in the USA, allowed lending in a highly competitive mortgage market to descend into ever riskier territory.
This risk was then passed around, re-sold and re-packaged as other products in another unregulated market.
When everyone realised they were sitting on a pile of shit there was a rush for the doors, most were not quick enough.
Major US lending corporations started to hit the wall, and the numbers got very big. So big the world markets were impacted.
Then everyone else in the capitalist world started to look in their piles and see how much shit was in there.....
 
#12
The removal of regulation by a short sighted government in the USA, allowed lending in a highly competitive mortgage market to descend into ever riskier territory.
This risk was then passed around, re-sold and re-packaged as other products in another unregulated market.
When everyone realised they were sitting on a pile of shit there was a rush for the doors, most were not quick enough.
Major US lending corporations started to hit the wall, and the numbers got very big. So big the world markets were impacted.
Then everyone else in the capitalist world started to look in their piles and see how much shit was in there.....

I bet your kids love their bedtime stories, don't they?
 
#13
Everybody lent everybody else money they didn't have, everybody somehow paid it back, except the Greeks, Irish, Italians, Spaniards and Portugese, so now we're all fucked. Bastards.
 
#14
Thanks everyone.The kid's now understand.I however am a still confused.Can anyone explain it to a 51 year old?
Bloody foreigners coming over here with their fiscal thingamajigs, it was better in the old days when you could get a bag of chips for a thrupenny bit, mind you some of those German bints are fit... where was I?
 

Wordsmith

LE
Book Reviewer
#17
Can it all be traced back to the sub-prime mortgage mis-selling by the septics?
The crisis is rooted in debt - and there are three broad sorts:

Personal debt: where individuals too on too large or mortgage or lived the high life on credit cards. They're now spending the bulk of their income trying to pay doen those debts - and in consequence have little money to spend in the high street.

Banking Debt: where banks ploughed money into risky types of lending. Some was mortgages (the so called sub-prime products) but there were plenty of other risky activities they got involved with. When the Lehman crash came along, they took heavy losses, which they're now trying to recover from.

Government Debt: where government spent far more than they were raising in taxes. At the height of the boom - when he should have been putting money away for a rainy day - Gordon Brown was still spending far more than he was raising.

Mechanisms

-- The sub-prime problems was what triggered the crisis. Banks suddenly realised they were sitting on a mountain of bad debt and were rapidly going bust. They were rescued by government bailouts, but the banks had to cut back on lending.

-- This cut back in lending caused world wide production to slow - and as production slowed people either lost their jobs or had wage cuts. Because of the loss of income, many people cut right back on their spending, didn't spend on cars, holidays, new TV's etc, and further contributed to the world wide slow down.

-- As production slowed, government that were already struggling with debt found they were in deep financial trouble. Some (Greece, Ireland, Portugal) needed bailing out so they didn't go bust. Others (like the UK) had built up a mountain of debt that will take a generation to clear.

Blame

-- First and foremost, governments. They control spending and set regulations. Had they controlled their spending better and regulated banks and individuals better; we would never have built up to the current levels of debt.

-- Next, banks - who lent stupidly. Much of the lending was carried out by investment bankers who gambled the bank's money so they could make big personal profits. When the banks went bust, a lot of irresponsible bankers walked away with masses of money - despite many of the deals they set up losing horendous amounts of money.

-- Finally, individuals - who just didn't think about their ability to pay back the money they were borrowing. And who built up debt over a 5 year period that they may spend 10 to 20 years paying back.

-------------------------------------------------------------------------

There's blame enough for all - and at the root of it all is the inability to behave sensibly with money; be it governments, banks or individuals. If the debt have been prevented from building up, we would not be in the present mess.

Wordsmith
 

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