The news is revealing more information about how desperate the banks were when the financial crisis took place in 2008. There was so much criticism about government intervention and the loans to banks, but most analysts are now in agreement that if the governments hadn’t intervened we would have experienced much more drastic economic panic and downturn worldwide.
The S&P is downgrading the EU credit rating, and if they didn’t they would most likely be criticized, sued or charged with gross negligence for failure to report the situation accurately. It is action the rating agencies should have taken at the first signs of trouble pre-2008. Enforcement of existing laws also would have raised the warning signs and likely saved some people who invested in banks, with Madoff and some of the other fraudster investment companies some huge financial losses and pain.
The government is calling for stiffer fines for companies who are found guilty of insider trading and fraudulent practices. The previous fines were a pittance compared to the money big companies made by engaging in the shady practices in the first place. The fines have been called their “cost of doing business.” Warren Buffet was quoted as saying that anyone involved in financial negligence that needed to get government loans to stay afloat should not have a dime left to their name, rather than being able to fill their pockets as a reward for really bad job performance (fill in your own adjective as you see fit to replace really bad). The fraudsters should be added to that statement and not have a dime left when their assets are frozen and seized to pay back investors. Negligence on the part of a person in a position of trust should carry severe penalties and I doubt many people, other than their lawyers, would disagree. We are not there yet by any means. Harsh penalties are, however, a worthy objective to prevent this type of financial malfeasance from happening again.
This situation begs a number of questions, such as:
Who can you trust?
Is there a safe place to invest your money?
How can you protect your wealth, if you have any left?
Laws and law enforcement need to change to protect investors and until they do, many people have chosen to invest elsewhere, such as in precious metals. Given that we are certainly not out of the woods regarding economic problems and the lack of ethical standards in the financial and investment industries, getting an insurance policy against financial Armageddon has a definite appeal. Gold has been and continues to be a safe haven investment during financially turbulent times and our current world financial conditions certainly qualify for turbulent.
As with any investment, understand what you are buying and with gold, such as gold bullion, a fair price is no more than 5-20% over the spot price of gold. Buy Gold Online today before the prices jump up again!