Quote:
Originally Posted by Betty
What happens if they do nothing? If they don't do any bail out at all and just the chips fall - what could happen?
The entire collapse of our economy? If so, what does that mean? That I'll be growing my own vegetables because my store won't have any? Will we all start stocking up on canned goods and hoard things? Will I not have gas for work? Or worse, will no one want what we sell and my employer will go out of business? Or will things fall then stablize before things like that happen?
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Basically, businesses will no longer have easy, liquid access to money. Millions of dollars of loans get approved pretty much daily to keep businesses going and able to act quickly. If the institutions that provide these loans don't stabilize, if they don't feel confident that they'll get the money they loan out back and they don't feel confident that the investments that provide them the money to loan out will continue to have value, then business can't move forward. Instead of borrowing that money, companies will have to get it from somewhere, in the form of increasing revenue and decreasing costs. Supplies will drop, prices will go up, jobs will be eliminated, shipping lines will be slowed down. Debts will be called in, credit available to consumers will start to erode away, etc. etc.
In the best case, a new balance point is found and things do stabilize. Worst case, the sh*t hits the fan, the fact that we exist on an economy of almost pure credit catches up with us, and the concept of value gets completely out of whack and we see out of control inflation.