Picture of financial crisis for layman's understanding
These past weeks I'm trying to literate myself about the financial world's jargons. My aim was to improve my understanding of the current financial crisis our world is experiencing. I've read many blog posts, magazines' articles & newspapers editorials claiming to offer their readers a simple picture of the financial crisis. But still, most of them lack the clarity & simplicity in their explanation that a layman requires to completely understand what's going on.
However, after abit of research online, I found two pieces of information that I believe could be very useful for the common man's understanding of the current crisis.
One is an article titled "How We Got into Subprime Lending Mess " published in knowledge@ Wharton on September 19, 2007.
And the other is the flow chart diagram on wikipedia explaining the whole business model of the investment banks in much simpler terms.
Now, about my take on the crisis, I noticed greed playing on both sides of the fence. Be it lenders or be it borrowers, everyone was trying to live beyond their means. Lenders were exploiting at their best, and borrowers allowed themselves to be exploited.
My solution of the problem is that we have to get rid of "interest" on our transactions. Promote interest-free financial sector, and that can only be made possible if fiat currency is replaced with gold-backed currency.
