How many times have you heard this question asked? If we had a quarter for every time someone in the media or government asked this question asked in the last year we probably would not have to worry about the global credit crisis.
Instead, the ripple effect of this crisis is like a thief sneaking into our pockets and saving, and stealing our money a little at a time.
On a recent trip to the Florida Keys we could see how the current crisis is affecting everyone.
Utilities, housing, food, and gasoline prices are all up.
People from all walks of life are struggling to make ends meet.
We asked ourselves this same question as we spoke to friends in the area about their concerns on the local and global credit crisis.
In the Florida Keys and around the country people trying to sell their homes are facing a difficult time as well.
While we might not think about it, the global credit crisis also affects the sale of luxury real estate.
This may be bad for the owners, and on the other hand it is beneficial to those seeking a great deal on a house.
In some cases the global credit crisis has caused a huge price reduction amounting up to fifty percent of the island prosperities.
If the average person does not have the more to buy something these days they have few options; beg or borrow.
The first is unlike unless it is a extreme case, at which point they would go to those closest to them for help.
That leaves the latter, to borrow money.
They can borrow funds from the saving, 401K, or use a credit card; all options can result in issues later down the road if there is a problem such as a loss of a job or lack of work.
If we find ourselves buried in debt because we panic and overspent, then we pull ourselves up by the boot straps and get back on track.
In general at this time there are plenty of people learning just what they can and cannot live without these days.
The global credit crisis could have possibly been avoided if the banking systems and the overall way our money is used did not exist as it does today.
We deposit our money and the bank uses these funds to their advantage.
They can lead more, and accomplish big task knowing that they have all this money to work with.
The practice of lending out more money than there are really reserves for is referred to as 'fractional reserve banking'.
Of course, if everyone pulled their money out of the banks that would create a whole new set of problems in the financial world.
This has long been a fear in the banking industry, which could not pay out all the money in such a crisis.
This is perhaps the main underlying reason for the instabilities we see today in only banking, but also affecting the stock markets and our economy.
It is now up to us to see that changes our made in our own lives and within the government and banking industry to ensure this crisis is averted in the future.
Just as with your health, it is wise to seek the advice of a professional when you have questions about your financial well being.