Ecocnomic Hysteria

We are in what they are calling a “Credit Crunch” at the moment. Fewer mortgages are being agreed each month. More and more repossessions are happening. The stock markets are going wild – but mainly plunging.
There is of course a natural cycle. Take for instance the trajectory of the baby boomers. They all start earning at the same time, max out their spending power at the same time and anyway, once they’ve paid for the wedding, started the mortgage off, and equipped themselves with all the mod cons they don’t need to buy so much for a while. The retailer sells less, has to make staff redundant, who then also have less spending power. The baby boomers gradually get promotion. The first round of electrical goods stops working. They start spending again. Perhaps they also now need childcare. Another group of people are emloyed. All these rhythms are natural and acceptable.
But what makes things worse is the attitude of the press. “Things are going to be awful. We’re going into a recession,” they say. Everybody stops spending and the recession gets to be worse than it would have been.
I wonder also, all of you who work for building societies, whether you send out those letters about missed payments with a type of glee, with a rubbing of the hands. I’d caution against that. Who would buy these repossessed houses anyway? The people who you repossess have to live somewhere – it may even be on benefits – which means in the end that you’re paying anyway. Do something else. Lengthen the time of the mortgage – you’re going to get the house when they die anyway – with its added value unless you’re dealing with a pretty shrewd investor.
And of course, why it’s become bad at the moment is due to the baby boomers again. They’ve probably just put their children though higher education, they’re beginning to take early retirement, and they’re looking after elderly relations, financially, as well as anything else, because the state can’t any more. It will pass. Just hold tight. Protect yourself, but spend if you can: you’ll be giving somebody else a livelihood. Money makes the world go around. The love of it is the root of all evil, they say. It is, in the end, but an abstract concept and there to serve us not rule over us.