It has been quite a few days since my last entry but I have been pondering the state of the local and global economies of late and, being a natural pessimist/realist I have not really been in the mood to natter away online. Actually, more shockingly still I have not even been online that much lately as matters in my personal life have been also keeping me away from the computer.
I think it would be safe to say at this point that we are heading into a deep economic valley and we can only guess how far we still have to fall. Like an earthquake the frightening thing is that there is no way to hide from it as it is global in scope. As Europe and the US try and pour money into the sinkholes that used to be insurance companies and banks and as at least one US carmaker ( GM) faces the possibility of going out of business it seems that we may really be teetering on the verge of a depression and are just too afraid to admit it.
Here in Trinidad we have started to feel many of the same problems as the more developed world including the need for government intervention into the banking and insurance sector. The giant CL Financial empire has seen its insurance arm CLICO forced to approach the Central Bank for help when it realised it had a serious liquidity problem. Thus far the Central Bank is suggesting that the shortfall may exceed $10 billion and who knows what is going to hit the the economy next as oil and gas prices remain a long way off from their highs last year. There is probably good reason to expect a devaluation of the TT$ sometime after we host the Summit of the Americas. Other than the PM’s urge to show off that he can spend our money I have still not understood why we have spent at least half a billion dollars to host the wretched thing.
It seems that hardship is on the way and, like every other sensible person, I am thinking twice before making any big purchases that I can possibly defer. I know that poor consumer confidence is sure to exacerbate the decline but I am also equally sure that the fundamentals of how we did business are extremely flawed and caution would seem the wise choice.
There are , of course, several possible ways to survive the tough times ahead stocking up on vodka and hunkering down to waft through the crisis in an alcoholic haze springs to mind. Unfortunately, if they devalue the currency any decent vodka will be out of range and the thought of drinking the local plonk would be even more depressing. I guess I will have to fasten my seat-belt and hope the ride is not too bumpy just like everyone else.