An American's Fear - The Grim Reaper View

Posted by Kris | Friday, November 28, 2008 | | 0 comments »

I just had a long discussion with my American friends during their business visits. They have serious fear and insecurities in their mind during this world financial turmoil. They are asking me whether Malaysia is feeling the effect of the dire economic situation. I "almost" wanted to say that the Malaysian Govt still thinks that our economy is immune.

Things are getting very bad. Here are the summaries of my discussion.

1. Many of their friends in various industries are getting laid-off. Financial and tech sectors are the hardest hit. Getting fired in US is a complete disaster, as you get near to zero compensation and it also mean that you have lost critical benefits like medical insurance coverage (more on this on why this is very important for Americans), etc.

2. US citizens are calling this depression the worst since the 1932 Great Depression, where you will see a lot of people out of job, literally begging for food, etc.

3. Getting sick and falling into serious illnesses could really bankrupt you in the US if you don't have medical insurance coverage which is very expensive. (it is easily USD300 per month)Thus, the point number 1. The reason on why medical treatment is expensive in the US , is because US is the land of mindless lawsuits. Thus, doctors need to buy ultra-expensive premium to protect themselves from lawsuit thrown at them. The cost is passdown to the end consumers aka patients. Example, a simple visit to the doctor would easily cost you USD150 bucks minus the cost of medication. And a stay at the hospital wards can burn you USD800 per day!!

4. Their biggest asset aka their home property have been falling on average of 30% this year alone. And the stock market in general have been falling like 44% this year. The 2nd largest fall since the Great Depression.

Who Is To Blame!?

The finance companies - They have been giving free money to anyone regardless on whether they are able to pay it back or not. Giving credit card with a limit of USD50K to an a 17 year old student is a no-brainer.

The automative industry-Offering alot of so-called interest free cheap loans for Americans to buy cars.This is why THE BIG THREE is in deep trouble right now.

And of course Americans need to take some responsibility in this mess in the first place. Spend first then pay later mentality really needs to be removed. Spending loan money and falling in debt is another bad habit. 

They need to learn the habit of the "Ant" . Always save for the rainy day and not like the Grasshopper who end up dying hungry.