The Answer to the Financial Firestorm

The global economy is currently in the middle of a financial firestorm. Central banks of both the United States and the United Kingdom have now established programs to bail out large banks, newspapers are discussing the liquidity/credit crisis, and for the first time in generation x/y lives they are unable to get a loan even though they have good credit. As the leaders of the financial system continue to try to "fix" the problem, they are forgetting about credit unions. Credit Unions have money to lend and are lending to people who have seeked them out, but the problem lies in my previous posts. Consumers are ignorant about credit unions as part of the solution matrix for their financial needs. 94% of financial consumers look to banks or consumer finance companies for help with their personal financial services. Credit Unions are standing by awaiting you to read this blog. Our economy is based on consumer spending with the ISM Services Index now encompassing over 90% of the US Economy. Consumer spending is enhanced through leverage (or the use of debt/obtaining a loan). The economy most likely dipped into the negative growth territory in the first half of 2008. Consumers are not spending and the leverage has been taken out of the marketplace as the consumer cannot get funding from banks as they try to fix the speculation on their balance sheets. Credit Unions can help the consumer and help the economy. Big banks still are not lending money and that is why even though the Federal Reserve has reduced the cost of cash by over 3%, mortgage rates have only declined 0.75%. Banks are using the opportunity to position their balance sheets for the future and clean up the mismanagement of their investment operations while conservative credit unions continue to play their role. If the government would level the playing field by giving credit unions access to alternative capital, then it is my contention that credit unions could make a historical impact in these historical times of our current financial firestorm. In summary, lets quit focusing on the weeds of the economy and lets start to grow grass. The banking failures and resulting bailouts are the weeds of the economy however Credit Unions are the grass that continues to grow, spread, and make the landscaping outstanding.

Signed a weed free credit union member,