This website uses cookies to ensure you have the best experience. Learn more

The Two Trillion Dollar Meldown Essay

2345 words - 10 pages

The Reasons Why: Our current state of affairs per Charles R. Morris

In the book, “The Two Trillion Dollar Meltdown: Easy Money, High Rollers And The Great Credit Crash,” author Charles R. Morris, gives his account of what he believes are the reasons for our current state of economic affairs, his arguments are many and his belief is that a combination of events is what has lead to our current dilemma. He informs the reader of the current credit crisis by discussing the instruments that were involved in making decisions, how those particular instruments work, and the abuse of those instruments. He begins his book by discussing the 2000’s credit bubble, the “long cycle of liberal ...view middle of the document...

” (5) As he begins to conclude his thoughts he touches on the actual numbers that we are seeing and also begins to play out some possible scenarios to be aware of. He concludes with some potential ideas that could help the current administration get a handle on what we are currently seeing in today’s economy. I will attempt to address his strategies later on in this paper.
To answer the question of whether I agree with his arguments is difficult for me to answer. I, unfortunately, am one of those uninformed citizens who really has not done much in the way of research to inform myself as to why we are in such economic strife. Most of my information comes from the few minutes a day that I am able to sit and watch the news. This book really opened my eyes and informed me about many of the questions that have concerned me regarding our current state of economic instability. Although this book was written in 2008, many of the things discussed in it have come true, and for the most part I tended to agree with most of his arguments. What I also find interesting is that the problem has been escalating for quite some time, beginning with U.S. steel and continues until this day. For instance, I do believe that greed has played a huge roll in what has happened. It all started with the steel industry of 1901 and their lackadaisical way of thinking. They must have believed that the war was never going to end and that demand for their goods was never going to decline. Contrary to popular belief, the demand for U.S. steel shifted from domestic markets to foreign. As the U.S. became more of a service oriented country and less manufacturing, other industries went abroad to Japan and Germany, those being industries such as electronics. As stated in the book, “the only way America can counter the Japanese challenge and regain world leadership is through comprehensive use of an industrial policy. Without a strong central state and a top professional bureaucracy- the two preconditions of industrial policy- America is doomed to economic decline.” (6) This in turn causes job losses, higher priced goods and services, and the inability of consumers to spend more. For me the biggest mistake that was made came from the S&L (saving and loans), or financial sector. It is amazing to me that no one would foresee the problem with ARM’s (adjustable-rate mortgages) and the long-term effects of the credit bubble burst, and what would happen when the bottom fell out of the market. Unfortunately, everyone was blinded by their own greed and selfish goals. Now the economy is in the toilet and many of those who were making the money are in the same place. This poses the following questions, what have we learned from this? What can we do to minimize risk and/or take advantage of opportunities according to Morris?
It is quite obvious that what others have done in the past did not, and still is not working. The only high point I read was during the Reagan...

Other Papers Like The Two Trillion Dollar Meldown

Macroeconomics Essay

1487 words - 6 pages . This was the period when the economic weakness had the maximum effect on all four countries (International Economic Trends). In terms of dollar amounts from 2007 thru first quarter 2010 the four countries real data is, United States $14.55 trillion in 2007, $14.61 trillion in 2008, $14.26 trillion in 2009, and $14.75 trillion in 2010.  The Real GDP for Canada $1,235 billion 2007, $1,240 billion 2008, $1,185 billion 2009, and $1,215

Operation Management Essay

1061 words - 5 pages . During 2008, in an economy * Flow B was $9 trillion, * Flow C was $2 trillion, * Flow D was $3 trillion, and * Flow E was –$0.7 trillion. Name the flows and calculate the value of Flow A is aggregate income; Flow B is consumption expenditure; Flow C is government expenditure; Flow D is investment; Flow E is net exports. a. Aggregate income. b. GDP. 4. During 2009, flow A was $13.0 trillion, flow B was $9.1

Economy in Usa

1941 words - 8 pages U.S. dollar reserves. The U.S. dollar has maintained its position as the world's primary reserve currency, although it is gradually being challenged in that role. Almost two-thirds of currency reserves held around the world are held in US dollars, compared to around 25% for the next most popular currency, the Euro. Rising U.S. national debt and quantitative easing has caused some to predict that the U.S. Dollar will lose its status as the

Taking It to the Net

603 words - 3 pages affected the employment trends. Statistics will also be shared showing the change in GDP and the different employment trends. The consumer price index over the last four years will also be examined to measure the pace of inflation. Keywords: gross domestic product (GDP), employment trends, inflation, consumer price index (CPI)   Taking it to the Net So how do you forecast a company’s sales for the next two years? What kind of data do you

A Viable Market for Inflation-Linked Products in China

773 words - 4 pages monetary policy in mainstream global currency markets, especially the Federal Reserve Bank (QE1 and QE2 totalled 2.3 trillion dollar). Its influence to China has two main aspects: Firstly, massive inflow of hot money. China's economic stability and prosperity gives a strong expectation of RMB appreciation. As a result, hot money flows into China through false declarations of trade, FDI and underground banks, pushing up asset prices. Secondly, “Dollar

Currency War and It's Influence for Indonesia

1329 words - 6 pages issue at a meeting in Washington in early October 2010. On the occasion, the IMF warned the governments in some countries not to use exchange rates as a tool to encourage increased exports, because it can cause a currency war between the countries in the world. Some countries being criticized for its policies to keep their currencies remain weak. Japan, for example, they intervene for the first time since 2004, to sell 2.12 trillion yen on

Wsj Discussion for September 2015

1317 words - 6 pages that investor anxiety is building ahead of the Fed’s two-day meeting concluding Sept. 17. Currencies in Turkey, South Africa and Malaysia have plunged to the weakest levels in many years against the dollar. The average 10-year government debt yield in emerging countries has increased significantly, even as U.S. yields have slipped this summer. Bond yields move inversely to prices. OPEC Sees Weak Oil Prices Through 2015 The Organization of the

Finance Sample Questions

5198 words - 21 pages trillion d. $4 trillion. e. $9.25 trillion 41. The real interest rate adjusts the nominal interest rate for: a. Exchange rate movements. b. Income growth. c. Inflation. d. Government controls. e. None of the above 42. If inflation increases substantially in Australia while U.S. inflation remains unchanged, this is expected to place ___________ pressure on the value of the Australian dollar with respect to

Yuan Vs Usd

1117 words - 5 pages reserve grew from $403 billion in 2003 to $1.5 trillion in 2007, while its trade surplus totaled $178 billion in 2006 and hit $268 billion in 2007. This clearly illustrates how the Yuan is undervalued in reference to the dollar. Having in mind that the Yuan is not fully convertible in international markets and the tight restrictions maintained by China, the country is able to maintain the exchange rate policy and still pursue its domestic goals, such

Us National Debt

3098 words - 13 pages The U.S. national debt the sum of all outstanding debt owed by the Federal Government, and is now more than $16 trillion. Nearly two-thirds is the public debt, which is owed to the people, businesses and foreign governments who bought Treasury bills, notes and bonds. The rest is owed by the government to itself, and is held as Government Account securities. Most of this is owed to Social Security and other trust funds, which were running

The Limits of China’s Consumer Revolution

987 words - 4 pages from more than 10% of GDP in 2007 to 2.8% in 2011, reflecting China’s decreasing reliance on exports to drive economic growth. In 2010, China’s imports ranked second in the world, and are expected to grow at an average annual rate of 27% in 2011-2015, outpacing export growth by five percentage points. As a result, the total value of imports is expected to exceed $10 trillion in only two years, providing lucrative investment opportunities and

Related Essays

Two Million Dollar Procurement For The Purchase Of Vehicles For The Fleet Of Trucks

684 words - 3 pages Imagine that you are working on a two-million-dollar procurement for the purchase of vehicles for the fleet of trucks and cars to be used by the U.S. Department of Homeland Security, Customs and Border Protection. These vehicles will be used for off-road driving on dirt roads in Arizona. Your manager has asked you to select the type of contract to be used for the vehicle purchase.  Choose to respond to this scenario from a government or a

European Debt Crisis Essay

1309 words - 6 pages ) The U.S. debt is more than $15.5 trillion, and is the sum of all outstanding debt owed by the Federal Government. Nearly two-thirds is the public debt, which is owed to the people, businesses and foreign governments who bought Treasury bills, notes and bonds. The rest is owed by the government to itself, and is held as Government Account securities. Most of this is owed to Social Security and other trust funds, which were running surpluses. These

A Student's Reading Of The Politics Of Rich And Poor

1115 words - 5 pages total net worth of America and Japan was respectively 30.6 trillion US dollars and 19.6 trillion US dollars. In as little as two years, the Japanese had capitalized on the slouch in the value of the dollar and reversed the ratio. By 1987, the United States had 36.2 trillion dollars in assests compared to Japan's 43.7 trillion dollars. Most of Japan's new capital was formerly American owned companies and property. This trend in foreign ownership

Ten Trillion And Counting Essay

616 words - 3 pages “Ten Trillion and Counting,” presented by Frontline provides quite a picture of America’s national debt as it surpasses the trillion dollar mark. They ponder the financial well being of current and future retirees while also exposing on how America got into this mess, and what the Obama administration plans to do during his term. America is able to close the gap year to year in its national budget by selling bonds and T-bills. Foreigner