Friday, October 10, 2008

Thoughts About Our Troubled Times

As the figures come in, it appears that this is the biggest financial crisis in the little over half a century that I have been on this earth. In all the difficulties are opportunities for redirection.

We are finding out how much wealth can be created on paper through bluff . People buy and sell property and pump the price up. Then they borrow on the value they have created. When the market "corrects", investors are left with their financial boats docked on sand at high tide.

It is certain that this failure of the financial system to will be studied in order to avoid a repetition in the future.

For years , modest homes that were built for working people were within their means. The mushrooming prices of real estate have left millions treading water with no hope of home ownership. Will a correction in the real estate market ultimately benefit people left behind in the boom years? Just like food is meant to be eaten and not stored forever, so too are dwellings ultimately for human use, rather than simply as investments. We need to rediscover our sense of proportion. Families were becoming enslaved to the roof over their heads and spending less time under that roof with their children. This modern day serfdom needs to be reexamined.

There will be a recovery. Perhaps there will be a reexamination of the practice of building castles on clouds, of building wealth on perceptions instead of substance. The vastness of our current difficulties that has spilled across borders reminds us of the storms we can create with the choices we make as investors. Now we all face that storm together. Whether we are business owners, workers or financiers, we are all sailors on the good ship earth. We need each other and G-d's help

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