Global Stock Market Jitters Causing Some Governments To Do The Right Thing

Global stock market will be jittery for at least the next 18 months. Using borrowed funds, individuals. and governments overextended themselves for years before the recession.  During the recession, governments stimulated —a euphemism for waste, and pork— their economies, using debt. Meanwhile, consumers borrowed to spend, and governments bragged about economic growth. Sadly, governments measure their performance by spending–the more they spend the more success they attribute to their programs.

Global Stock Market Requires Detour in Behaviour

Global Stock Market Jitters Need A Detour In Behaviour
Global Stock Market Jitters Need A Detour In Behaviour

Now, we must account for our irresponsible behaviour, which caused individuals and governments to carry excessive debt. Particularly Greece, Portugal, Ireland, and England, to name a  few countries, are awash in debt, and their governments need to start reducing programs and policies that drive spending. Unions, particularly government unions, will balk at cuts, which will disrupt economies, and ironically government debt will increase. Do these Governments have the confidence to transcend politics and start pruning programs?

UK’s Conservative Prime Minister, David Cameron, in a recent speech preparing the public for his first budget, said, “The overall scale of the problem [state of the country’s finances] is even worse than we thought … decisions we make will affect every single person in our country. And the effects of those decisions will stay with us for years, perhaps decades to come.” How true!

Global stock market gyrations results from many factors including greed, fear, panic. People need to take control of their finances. Governments need to become better stewards of taxpayers funds. A day of reckoning is coming for many countries, USA and Canada, included. We must start to tell people as Cameron did that government must lower spending, which will affect people for decades. We must stop looking to government for all solutions. With less government, Canadians and Americans will be much better off.

Therefore, since I don’t think existing governments in North America and Europe will shrink, and cut unneeded programs significantly, global debt will linger, and stock markets will oscillate regularly. Be careful as you ride the cycles.

© 2010 Michel A. Bell

More Like This:

Avoid These Investment Myths

Michel A. Bell

Michel A. Bell is a former senior business executive, author of six books (including Business Simplified released in 2018), speaker, and adjunct professor of business administration at Briercrest College and Seminary. Michel is a Fellow of the Chartered Certified Accountants (UK), holds a Masters of Science in management degree from Massachusetts Institute of Technology and a Doctor of Business Administration honoris causa from Briercrest College and Seminary. He is founder and president of Managing God's Money.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.