Monday, March 30

Simple Economics

I've been looking everywhere for a simple explanation of our current economic situation. The problem is that it is a very complex and multi-layered issue that can't be easily broken down, but I think this piece by that was posted at Simple Mom this week is about as good as I've seen.

It's well worth a read if you want to try and understand where we are at today. Here's a little tidbit to get you started...

The media has tried to explain the current economic crisis. But many of them don’t fully understand it themselves, so elements and details are lost in translation. The ultimate failure is trying to explain it in a matter of minutes - and this is impossible. You have to keep it simple, and then add layers of complexity as each level is understood.

So let me tell you a story.
Meet Ivan. Ivan is an investor. After a recession in the early 2000s, Ivan pulled his money out of the stock market. He wanted a safe investment, but interest rates were very low and because of this, government bonds offered a low return.

You can continue reading here...


The New Arthurian Economics said...

If you follow the link & read the story, two paragraphs in you find the problem: "Barry suggested that Ivan invest in mortgages because they’re safe - real estate prices have never had a down year"

If it sounds too good to be true, and all that.


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