Roller coaster ride

I myself am not a fan of roller coaster, just as I thought: What is the fun of riding something which only makes you worry and scared? But many people who actually love riding roller coasters often claim the excitement they experience in the ups and downs of the roller coaster ride. Sadly, when it comes to money and investment vehicle, not many people are really excited with the roller coaster ride of their investment.

With so much uncertainty in the market, many people withdrew their money from the market and keep them elsewhere such as in bonds, CDs, gold or silver, just as they want to be able to sleep without worry.

What is the main cause of our worry? I guess the main cause of our worry is our unwillingness to lose something that we have (Whatever they are). Many psychologists, neurologists and psychoanalysts had studied about worry for a long time yet they cannot really find a permanent solution to fix our worry-ness. True, scientists had found a way to suppress our anxiety with drugs (as they managed to find the nerves activated when we become worry), but these "suppressants" are not the true answer to our worries, since they basically suppress the after-effect of our worry-ness only, and they do not treat the cause. They basically numb the nerve, it's not much different from the illegal drugs which were sold off the street. They pretty much have similar effects: They are addictive, create temporary happiness or illusions with long term consequences.

One of my former employees (back in the days when I used to manage a sandwich shop) told me that his wife was addicted to the "anti-depressant" pills that she was prescribed to treat her problems of anxiety. I remember asking him what happens if his wife missed her daily dosage, and he told me that she will start screaming and throwing things off like a mad woman. Sad but true, but here in America, we are used to these type of situations. We often treat everything as medical, biological or neurological problems. We try to solve everything by drugs or medicines. If one catches a cold, he/she should take cold medicines (which basically treat the symptoms of the cold, and not the cold itself). And the same thing applies to our economy as well.

When the economy collapsed because of the credit crisis, US government responded by lowering the interest rates, which basically provide cheaper money to the banks, but yet the credit crisis still persisted. Then they moved by opening a special credit window for any financial institution, but the credit became tighter and the rate was still high. Later on, they moved by providing more liquidity (read: money) to select financial institutions by pouring billions of dollars to banks (regardless whether they want it or not) under the controversial TARP. Then what happens? Nothing. The credit market remains tight (and for some people it's even tighter than ever). The economists in our government think like those scientists in the medical fields, they tried to treat the symptoms and not the cause.

What is the cause of the crisis? Well, there are many factors but some of the main factors are the drop of housing price and the job loss (at least in my opinion). When people truly have extra money to spend (not from borrowing from their credit cards), the economy will definitely be better. Until then, any superficial things that the Feds and Treasury do will be like treating the symptoms of the economy and not the cause. In fact, their actions will more likely benefits the rich (Wall Street financiers, bankers and the likes) more than the poor who really need them.

My solution? Conceptually, it's simple. Don't give the money to the banks or bankers, give it directly to the people who need them! But it is not as easy as the theory. There are a lot of problems involving this seemingly simple concept. How do we determine who needs them or not? How do we do that? How can we make sure that only those who need them gets them? How do we eliminate frauds? How can we make sure that everybody will feel that the distribution is fair? And many more questions... The more I think about it, the more I see a probability of more problems.

After all, this world is a complex world because of the complex beings who live in it. And sadly, many of these beings live like wolves toward one another, devouring one another for their own benefits... Could we just change (maybe just once) for the sake of the world? I guess it's a question for us to answer personally.