It is always best to be cautious in financial matters.

It is always best to be cautious in financial matters.

11:40-12:10

Over the course of human history, civilizations have had many ways to exchange goods and services. It started out with bartering back in Ancient Egypt to the invention of coins in Ancient Rome. Over time currency has existed in many forms and has fluctuated in value. One of the biggest steps by many international governments is to gold-back their currency in an effort to prevent inflation and use gold as a standard to compare economic strength with other countries.  Currency is an important of societies throughout the world today and has evolved to be the building block of Capitalism. Capitalism relies on people to use currency to buy products that will put profit in a company’s pocket. However, there are times when a consumer may purchase a product and there are times when vigilance is used.

First consider, when it is appropriate to cautious in financial matters. During the close to catastrophic events of the 2008 recession many people were losing confidence in the market and started to maintain caution when spending money. This attitude was part of the cause for the financial meltdown in 2008. Many lending companies were trying to quell the demand of frenzied consumers who could not keep up with the fluctuating market and started to borrow money. Soon consumers in the US started to assume that it was acceptable to borrow large sums of money as a way to temporarily solve their problems but they dug themselves into a deeper hole. Essentially, the subprime lending trend was a manifestation of the US consumer culture. Encouraged by ubiquitous ads, Americans felt the urge to keep up with the Dow Jones'. This meant buying new cars, new houses, and going on luxury vacations, mostly on credit. People, in general, were living lifestyles they could not readily afford. "More" equaled "better" and many disregarded financial responsibility to maintain appearances. Pretty soon when the government could not offer bail out plans to banks to keep up with this demand for money by consumers, people realized that it is best to be cautious in financial matters.

On the other hand, there are times when it is not suitable to be cautious in financial matters. When major natural disasters or health crises occur people can not be cautious. In the aftermath of Hurricane Katrina in 2004, many people in New Orleans and other hard hit areas were hopelessly watching their homes being destroyed and did not know where to turn. In response to this event, the US government under President Bush, FEMA was established to help provide temporary emergency relief to those people in need. Under FEMA, new temporary trailers and daily food parcels were issued to satisfy the needs of millions of stranded families. Another example, is the 2008/2009 outbreaks of H1N1 Swine and Bird Flu. The government issued emergency orders to citizens for prevention of transmission and issued vaccines. Also many quarantine shelters were put up to isolate infected individuals. Ever since this outbreak, every year the government has spent billions to offer free flu shots for the H1N1 viruses. Another example, of when not to be financially cautious is to encourage the value of human life. Every year there are many fundraising events worldwide in an effort to help cancer patients. Most notable example is the annual New York marathon for Breast cancer prevention and research. Many people take part in this major event and donate an entrance fee that will be used to find a cure and help treat patients with the disease. In both these cases, vigilance was not given first priority over money rather money was used to help save lives.

In all, there needs to be a balance of caution and spending money in any country. People have the right to be financially vigilant when the economy is suffering. However, regardless of economic situation people need to pitch in money and help the needy in fundraisers for lifesaving efforts such as treating cancer patients or for disaster victims.