What is the remedies for financial crisis of 2008?

Answer 1

The financial crisis has been one of liquidity. This refers to the ability of an asset to be converted to cash. It is important for banks because if there was a sudden decline in deposits, they need to have cash on hand to cover their reserves. They acquire this cash by selling assets such as investments, securities, or now most famously, collateralised debt obligations (CDOs). CDOs are where the trouble began. Many CDOs were secured (collateralised) by mortgages. When, due to the plunge in housing values, those CDOs became totally worthless (most investors were totally unwilling to buy them), a lot of banks were stuck with them. The value of these assets continued to drop and banks started needed cash to cover it. Had these bad debts been easily liquidated, we wouldn't be in this situation. Now we need to get liquidity back into the markets. Banks are still strapped for cash and we are starting to witness a decline in lending. This causes businesses to have to cut back. This is why we are now seeing an increasing unemployment rate.

Realizing that does not directly the question, we have to ask ourselves "How do we get liquidity back into the market?". That is not as easy as some suggest it to be. Economists refer constantly to the "pushing on a string" analogy when it comes to government policy effects on the economy. It is very very easy for government to pull back on the economy and slow it down or even stop it (pulling on a string) but it is extremely difficult for government to push the economy forward (pushing on a string). Governemnt policies cannot grow the economy very easily. Nor can they solve this crisis easily.

Revoke the charter of the Fed and set up a new national banking system that is constitutional and reflects a sound money policy. Texas Rep. Ron Paul has been trying to get congress to face up to this issue for years.

There are many things that drive an economy, but one certainly is consumer confidence. If people have a belief in future success they will invest their time, energy and capital in ways that will restore the economy to a growth path. Confidence has been undermined in many ways over the last two decades. One of the greatest problems has been the lack of investment in manufacturing in this country. The result has been a loss of what the politicians term "good jobs". A series of articles discusses the problem and things to be considered in a long term solution. Please see the related links below.

Tax cuts! Further reduce individual and corporate tax rates across the board and announce that there will be no tax increases for at least two years. Do this at both the Federal and state levels. This will increase the confidence of individuals and businesses, will increase trade, investment, business growth, and hiring. As businesses and individuals all become more successful, even low tax rates applied to a higher volume of trade will actually bring in more income to governments, not less. When the capital gains task rate was recently lowered, revenue to the government increased!

The crisis is a lack of trust among banks. We still don't know the sleeping dogs. The first step would have to be a total transparency of large interbank loans, similar to stocks. Since banks don't like this, only government can order disclosure of essential loan data. Pouring money into the system does not solve the problem. There is enough liquidity, it is just not being used.

Answer 2

150 years ago the world currency was GOLD and SILVER.

With the help of paper currency the economic activities rises and the development of the world comes to this stage.

GREED was the major factor, that help the US and other countries to drop the GOLD backing and moving to PETRO-Dollar economy.

Reality is the multiples effect and exposure has pushed the $600 billion deposits in US to $600 Trillion contracts, derivatives etc.

This bubble is close to collapse and the solution I consider is

1- Parallel Currency that will be 10 time or 100 times more valueable than US$ - a new world currency

2- GOLD backed currency

3- BARTER TRADING - just kidding

4- Saving and

Answer 3

1. "America needs to shift its economy away from consumption and toward investment…best way to create good jobs in the U.S is to create new industries and companies and to innovate within old ones."

2. "We should pay for this [renewable-energy projects] with a 5% national sales tax--call it an American innovation tax--which would be partly offset by a small reduction in income taxes. This would have the twin in benefits of tamping down consumption and yielding some additional funds. All the proceeds from the tax should be focused on future generations because we need to invest massively in growth."

"We need a radical re-balancing of American government so it can free up resources to fund future growth."

EXCERPTS FROM

Restoring The American Dream

By Fareed Zakaria

FROM THE NEW YORK TIMES

Answer 4

Abolish the wages system. Produce goods and services to meet human need.

Answer 5

what is global economic crisis?