Is the 'Credit Crunch' merely survival of the fittest?

Ok, so this is my first blog - so I thought I would start with a nice easy topic...

Therefore I will attempt to explain the causes of the global recession, with reference to comments by PM Gordan Brown, high power business moguls and most importantly of all my Mum.

Historically reccessions have come about in the UK once every decade (so I am told), except at the start of the naughties when, apparently, the economy continued to rise steadily, rather than collapse into the abyss.

Only it didn't did it?

When you think about it on 11th September 2001 the American stock exchange closed for the longest period of time since the great depression (which I was suprised to find was 1933 and not last week). Upon the reopening of the markets on the 17th September share prices across the Dow Jones had plummeted by on average 7.1%. That represented the largest single day decline on record. Ever.

Over the course of the entire week, $1.2 trillion had been wiped off the Dow Jones - so even though this didn't take place over two successive quarters of a year, surely such significant losses represent a recession of some sort? Something to ponder perhaps.

Anyway, back on topic. The reason we are in the mess we are at current is simple (as far as I am concerned) - over the past decade or so our economy as a nation has thrived and we have all reaped the benefits in some way or another, be it through more money being made available to the NHS, education system or somewhere else. Only there is one thing that the so-called 'Greatest Chancellor' the UK ever had forgot to do...save some money for a rainy day.

The Australian dollar has historically been inferior to the pound, however during it's last significant period of growth the Country put a large amout of money away as a contingency fund, for when times weren't so great. The Government paid off it's debts and as a result the Country recorded a 1.9% growth in economy for the first quarter of the 2008/2009 financial year, a figure our own country could only dream of at the moment it would seem...

Another explanation of the Credit Crunch that i heard recently came from a member of Dragon's Den (I forget which one),anyway, speaking to BBC news he told how he believed that the recession was natures way of ensuring Darwin's theory of evolution (also known as survival of the fittest) occurred. This means in other words only the strongest and most worthwhile businesses survive and prosper, whilst the less useful or meaningful fall by the wayside.

This brings me to my Mum...

When we were out in town shopping at the weekend my mother turned to me and said "It's depressing all these shops shutting down isn't it", when i asked her to elaborate she continued "Well soon there'll be nowhere for me to shop".

I asked her to name the shops that had shut down in town and she listed them off for me: Woolworths, Peer, Barratts...then I asked her when was the last time she actually bought anything from any of those shops and she said "Well i don't, but I like looking in them though"...

I think it would be safe to say that this particular comment sums up why the shops closed indeed. No one shopped there. Thus, it would appear that bloke on Dragons Den was indeed correct. The fittest will survive, the others will not...