Capitol Hill Blue Forums Political Issues Finance, the economy & Economics How will the financial crisis develop?

Not necessarily. You have lived a debt free life but how long can you last without a job?

Lower spending means less demand for products and services which means less production by companies (big and small) which means layoffs, which means that even people with no debt could lose their jobs which means that nobody, ABSOLUTELY nobody benefits from a credit crunch (well except those that root for the collapse of society - you know who you are).

For now the economic problems have been felt only in USA and the dollar has suffered since the FED kept interest rates low to stimulate the economy which weakens the dollar. The slowdown has slowly spread to Europe in the past few months and you have seen the dollar gains some strength. As you have witnessed today, the global market is directly correlated to the US market.

If there is no bailout plan I believe we'll see 15-20% unemployment in 2009 in parts of the country.

A lot of business, big and small, fund their payrolls through credit lines... if credit is tight, look for struggling business to close their doors fast.