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Contagion

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Submitted By davecarr58
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The ability to stop contagion from happening is impossible because people react before actions can be implemented but some control is most definitely possible. The Asian countries mentioned in the video, Thailand, Malaysia, Indonesia and Korea witnessed collapsing economies because investors and individual withdrew their funds very rapidly causing panic and creating a chain reaction. Limiting the amount a consumer can withdraw from an account on any given day may help but there are no limits on deposit or investment amounts so it would be difficult for consumers to accept. When economic despair is upon us we can just close banks for a period of time allowing all of the hype to dissolve. Like the video mentioned the LTCM was unable to receive Governmental help because they were privately held but on the verge of economic collapse the governmental needs to take control. I mean, who is the only entity in the world that can send consumer’s letters stating that on error on a tax return from five years ago was made and you owe this much plus 300% interest. That situation possibly created economic crisis for the consumer on the receiving end of the letter so why is it beyond their control to help. Public or private funds affect the well being of the economy and the government basically makes the rules and controls the interest rates of the economy.
I believe that when an organization or country receives a bail out the lenders should have control of how and when the funds will be repaid. Recent events give witness to that statement because many American companies were given bail-outs without stipulations as to payback and they handed out large bonus checks to executives while cutting benefits to employees. They ability to dictate policies, rules and governmental regulations, on the other hand, is another greater power that should not be given to the lenders. You can

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