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Moolanomy Personal Finance Essay

In the same way, Americans themselves were scammed by their own internal EHM—the US banker. As Moolanomy Personal Finance (2008) asserts, “Over the years, mortgage lenders were happy to lend money to people who couldn’t afford their mortgages. ” But the bankers did it anyway because they “were able to pass the risk off to mortgage insurers or package these mortgages as mortgage-backed securities. ” They then charged the debtors higher interest rates and profited more from sub-prime loans.

If the debtor defaulted, the banks would easily seize the house and sell it again. But there came a point in time when people couldn’t afford to buy homes anymore and mortgage-securities became worthless, so a financial crisis occurred. However, some US lawmakers are currently searching for scapegoats and have recently charged China for pegging the Yuan and creating financial woes for the world. The lawmakers claim that the financial crisis is caused by a devalued Chinese Yuan or Renminbi.

However, for the global consumer, a devalued Renminbi is simply on “sale,” and Chinese businesses and employees are making personal sacrifices to make their products or services more competitive through lesser wages or unhealthier conditions. If one thought of the US as a

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superstore next to the Chinese superstore, and the Chinese initiate a super sale, consumers, of course, will run to the Chinese superstore. To remain competitive, the US superstore has to lower prices too, but it refuses to do so. Instead, it insists that the Chinese super sale, using personal sacrifice, is manipulation.

As a Chinese government representative rebuts through Yahoo News (2010), “The United States… cannot ask others to (raise) their currency for the sake of its own export expansion — that would be an egotistical practice. ” An intelligent worldwide consumer realizes that the US superstore is using political spin to advance its interests in trading goods at high prices. But consumers naturally desire inexpensive products and services, not over-priced commodities like oil whose market price is controlled by cooperative unions like the Organization of Petroleum Exporting Countries (OPEC).

Thus, if the Chinese superstore sells goods at low prices, they are not only being reasonable, they are also serving the needs and wants of global consumers who are not interested in paying high prices for American products or services. If the Yuan appreciates, inflation will occur. People will have to pay more for computers, cell phones, clothes, shoes and practically all manufactured goods. Some people think that because of this, jobs will come back to the US. However, corporations will simply move to other countries like India, Brazil or Vietnam, where labor is cheap.

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