The financial debacle has many tentacles, each threatening to strangle our sense of security and plans for the future. Jobs are in jeopardy because the credit crunch stops the normal pattern of business borrowing dead in its tracks. The typical assets of saving families have lost 20-30% of their value. Maybe the rise over the past few years was illusory but that matters not at all when the investors have to readjust their present spending and plans for the future.
Fears of a recession are fueled by a drop in consumer spending which sends signals to producers to reduce output which causes job loss which leads to lower consumption which continues on and on, hopefully not ad infinitum.Continue Reading