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How to Survive the Coming Financial Meltdown?

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The current global financial crisis can be said to be caused by the macroeconomic expansionary monetary policies of global governments and also at the same time the lack of regulatory framework from the authorities.

As a result of the expansionary monetary policies the market is full of liquidity or in other words too much cash is available. The lack of regulatory framework from the authorities actually help to hasten the process of the financial crisis.

There are two schools of thought that are currently available to deal with our international monetary system. One is the Keynesian and the other is the Austrian School of Economics. Keynesian theory mainly deals with the macroeconomic expansionary monetary and fiscal policies which they believe that somehow by ever increasing its spending through monetary and fiscal policies, it will be able to 'spend its way out'. However the Keynesian approach through expansion of credit and public spending on infrastructures will result in 'Short Term Gain but Long Term Pain'. The Austrian approach disagrees with government intervention in the monetary system. They believe that weak and troubled banks and corporations should be allowed to fail due to excessive risk taking instead of given bailouts because this will encourage repeated offence in the future. The Austrian School employs a different approach and is more conservative but its policy will result in 'Short Term Pain but Long Term Gain'.

How to prepare for survival ...

(Read the full article in The Market Oracle)

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