Tuesday, September 27, 2011

Financial Meltdown

Well, I guess we all know the economy is getting worse. Things in Utah are not as bad as in other states, but still, a lot of companies are not hiring full time people because they want to try avoiding paying any benefits. The root of the problem is that there isn't enough credit available for small businesses borrow money. We all have this idea about debt being a bad thing, and it is, especially when you have too much. But on the other hand, when investor's buy up U.S. debt they don't really expect the U.S. Government to ever pay off its obligations. They rely on the U.S. to be able to pay the interest on those loans, and that's how investors make their money. So what's the problem then? Shouldn't a huge national debt be a good thing? Not exactly. You see, if the country ever borrows so much money that it can no longer pay the interest on its loans then it has no choice but to default on its obligations, or it can, as is the case for the U.S., simply print more money to finance its debts but that would eventually created unwanted inflation.

So there's my shot at typing some financial gobbledygook.


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