How badly will the credit crunch affect you?

Still think it’s business as usual for the banks?  Still keeping your head in the sand about the looming recession?  This collapse of the credit based economy of the West was predicted by Dr.R. Lin, founder of the Ultimate Entrepreneur 15 years ago.

The credit freeze started in August and the shock waves are still being felt by the banking institutions with worse feared to come. 

The banks had hoped that they were witnessing a temporary summer credit freeze, over by September and with limited financial consequences. However, the past few weeks have proven otherwise and the crisis is turning into something far more damaging.

Large banks have already written off £50 billion of losses linked to the credit markets, with UK bank, Northern Rock plunging into near collapse, along with the biggest US mortgage lender, Countrywide Financial, and Germany’s IKB. 

The mood in the markets is getting much darker, with the main banks forced into a second wave of write downs. Citi announced another 6.4 billion losses related to the sub-prime mortgage crisis, Merrill has also revealed further losses and HSBC has a potential loss of £45 billion on it’s balance sheets. Barclays also wrote off £1.3 billion. 

Future expectations are that Citi will write down a further £15 billion, Royal Bank of Scotland are expect to announce sub prime losses of more than £1billion. 

City analysts have estimated that the total sub-prime linked losses could reach a massive £500 billion. That’s going to hurt us all! 

Incredibly. The Federal Reserve’s chairman, Ben Bernanke initially estimated the losses at £50billion! Way to go Ben! And he’s in charge of the American economy!!!! 

This problem is surely likely to affect other types of American debt, credit cards, car finance and unsecured loans. 

Especially when you consider how the financial markets managed debt in recent years. Mortgages, credit card and unsecured debts were sliced up into packages and sold onto investors across the globe. No-one really knows where the pain is being felt until the bombs go off. 

The climate of fear has hammered bank shares, and it has barely started. One UK banker predicted that it was going to get much worse. Mortgage approvals are dropping, as the market cracks under the strain of higher interest rates and the credit crisis. 

It’s not only bankers who are worried, so are those who run the economy. Bernanke has advised that the US credit crisis has affected the American economy, indeed how could it not? 

Both in the US and UK, food and oil prices were putting upward pressure on inflation whilst the turmoil in financial markets was tightening credit conditions. IMF chief economist Simon Johnston, warned that the world was facing a ‘perfect storm’ of a 1970s style oil shock combined with a 21^st century credit crisis. 

The alarm has sounded for the US economy as fears grow that house prices will drop by 15% and in some states by as much as 30%. Goldman Sachs sees a 40%-45% probability of an American recession.  

It’s going to be harder to get loans as banks hoard their cash, harder to pay back the loans and credit cards and mortgages we have as interest rates go ever higher, and as the economy falters and stalls, jobs will be harder to secure. 

How deep will the US housing downturn be and how long will it last? What  effect will the US crisis have on the UK and Europe markets? Just how bad is it going to be?

Don’t wait to find out, start planning your own survival now.

Clear all your debt, try the Ultimate Entrepreneur’s debt cancellation programme. You can learn more at http://www.wealthfreedomfighters.com 

Make more money, launch an at home business, or take a second job, but bring more money into your household. 

Make your money work for you by investing in key utilities that never lose value. 

Try to put your money into valuable currency, don’t hoard dollars, pounds or Euros. Swiss dollars are always a good bet. 

Start preparing now and you’ll be ahead of everyone else when the crunch comes, don’t leave it too late.