We have all read or seen the news: Global stock markets around the world continue to deteriorate this Friday. With markets falling to levels not seen in five years or more, investors fear a world recession and the credit markets freeze up everything on it’s way to confidence. Some might think those juicy bailouts just aren’t enough, or the right answer to get markets running again. But we can’t really know that for certain just yet, or that’s what media tells us.

Now, confidence is everything in finance. This means that confidence is a risk measure, so if there is no confidence it is just because the perception of risk has increased. The financial theory suggests that more risk can lead to more profit (again, in theory) so, all bank systems work under a balance between risk and profit.
However, when taken too far, what happens is exactly the opposite, meaning they lose everything.

Does that mean the banks just went too far?

Indeed! The risk management lost control.

Under those circumstances, Can any individual or group really understand and describe accurately what’s going on in the financial markets? Could that person possibly give a solution?

This unfortunate economic meltdown has exposed some of our so-called economic gurus who for years have portrayed themselves as the world’s leading authorities but in reality have never had a real solution to problems past and present. Now that times demand accurate analysis and precise decision making, our experts are too afraid to admit the lack of knowledge or take the responsability to explain people how they really work and what their priorities really are.

On the other side we have populations that watch the markets play ping pong with their financial future in panic, but yet, they are (or feel they are) unable to determine the cause of a problem. This feeling of impotence has lead ordinary people (like you and I) to just stare at the TV, or read the paper in horror instead of making an effort to independently solve the problem, find a solution, or demand reasonable answers. There IS a way to unleash from the sensation-driven media, there IS a way outside that TV that can point us in the right direction.

Instead, the hysteria continues to grow and cause more panic. It is very difficult to see through the dramatization of the actual reality of the situation promoted by the media and those companies who now, refuse to give any information on what is happening. Somehow, it seems impossible to pinpoint where our money is, so we only know of the dimension of this crisis through the media.

The Economist writes today in it’s leading article “saving the system” that “more boldness is needed to avert a global economic catastrophe”. But this system cannot be saved. What we are facing is the implosion of the credit bubble. And we are all paying for it. We are paying for the years of apparent bonanza, for the super duper gold card way of life.

So, if we are all paying for it, why should we put our efforts into salvaging a private central banking system? What is the point in treating the super rich individuals super kindly when they are playing mudball with the world?

Confidence is a risk measure, which can lead to profit depending on its management, right? And any economic system depends on people and their spending.

The question is: Where will we, the people, put our confidence?