Crisis of Credit Explained to Kids

How and should you explain the crisis of credit to your kids? At what age and at what time as a responsible adult and parent should you begin to explain to them that changes in lifestyle will be necessary and that the changes will probably be permanent?

An even greater question is should you begin to prepare your children for the drastic changes in lifestyle that are surely coming with the Long Crisis? The credit crisis is only one of the three converging crisis of a financial meltdown, climate change, and peak oil that will change life on this planet for the next 100,000 years. Which is, in a human being time reference, to say forever.

The video makes an effort to explain the linkage between home owners, mortgage brokers, banks, Wall Street, and investors, and how once underway the credit crisis creates a feedback loop that is difficult to break out of. There is no solution to the problem given in the video. I doubt if there is one, at least not one that the governments will allow. The destruction of capital will continue at its own pace no matter how many bailouts the governments of the world come up with. Mr. Market will do his work and probably cruelly confound the experts at every step of the way.

In time, perhaps many years of time, a new way forward will emerge. Probably it will be a way that we are now quite unprepared for. Until then everyone will be trying to cope with an uncertain and rapidly changing world. When you realize that three converging crisis will all grow in intensity over the next two to three years, and will move towards the extreme over the next three to ten years, it certainly appears only prudent to start taking action to protect yourself and your family now.

But how do you tell kids under ten that by the time they are 17 to 20 years old gasoline will probably be so expensive that it will be impossible for them to drive around in an automobile. Can we develop fully functional electric cars by then? Maybe so, but it will be difficult as GM, Chrysler, and Ford go bust and bring down the automotive parts industry with them. And motoring will never be the same unless there are vast improvements in batteries that can give an electric car a decent range between charges.

There is some hope that in the crucible of industrial destruction entrepreneurs will start new companies that will supply the marketplace will new products that make sense in a new world. That is, if a government that will likely impose intense and pervasive regulations on every business does not make it impossible for anyone in the US to be an entrepreneur.

The era we are entering into will bring on the need to make choices that are now thought of as unthinkable. For example, at a time when President Obama is promoting a college education for every child how do you prepare your own children for an uncertain future where the ability to grow and to process your own food is likely to be far more important knowledge that that gained from a college education? Will a higher educational system even survive in a world that becomes survival oriented?

As a parent you will probably need to make decisions that will be in direct conflict with government initiatives. The government will be the last to tell you that the traditional “American way of life” is over, never to return, to be replaced by a downsizing of everything Americans now hold dear.

Perhaps we will be lucky and stagger through the three converging crisis. Perhaps not. The “Crisis of Credit Explained to Kids” video and others like it may explain how current events occurred but give no clue as to a road map for the future. You will soon on your own have to make tough decisions regarding your families future or they will have no future. It’s a tough world out there starting now.