How to explain economic crisis to an 11-year old?

Any suggestions? Perhaps it should take the form of a tale, as in:

Once upon a time, there was a girl who wanted to buy an Ipod. Now, the price of Ipods was going up all the time, so she decided he should hurry up and buy one soon, before the price doubled…

Anyone want to continue the saga or restart it?

A banker, a rating agency guy and a mortgage broker walk into a bar…

They collude to sell dodgy loans, wrap them up into toxic packages and rate them as risk-free. They proceed to inject these into the global financial system - and now it’s falling apart.

…No Joke.

Try this - interfluidity.powerblogs.com/pos … 7488.shtml

EDIT:

punchline: “…that piggy Bank Santa gave you for Christmas last, do you still have it… yes oh you do thats great oh your mother told me to tell you Santa is dead it was on the news I’m very sorry…”

Dear eleven year old

relax

by the time you’re 20 it’ll all be fine again.

:angry:
:angry:
:angry:

Just don’t.

Let Geoge Parr, Conservative MP and Investment Banker explain it

es.youtube.com/watch?v=pFmYIFk5i1Q

Have you a meeting with the government coming up?

Brian?

I think the 11-year old could probably get a better handle on this than some of our esteemed commentators.

Anyone got a link to that money as debt cartoon on youtube - I think that could be a good starting point, but then it’s been a while since I was 11 myself and I was a bit of a child progidy! :mrgreen:

Win any spelling bees? :smiley:

tell her she won’t be going to that nice fee-paying secondary school any more

(actually had a conversation with someone who’s related to the bursar or one of Dublin’s most well-known private schools at the weekend - the bursar in question is having many unpleasant discussions with parents who are unable to pay the bills. Imagine trying to explain that one to your kids…)

Tell her that Santa’s helpers invested all their money in igloos. With global warming, these igloos are melting and they need more money. But Santa has decided to outsource to China.

Tell her Santa will not be coming this Christmas because the banks will no longer give him a big enough overdraft limit to provide the cashflow to be able to employ the eleves until Christmas. Plus business looks like it will be tight this Christmas with the tax increases being announced next week by Brian Lenihan (aka the Bad Santa).

She will understand that…

The US Federal Reserve and Central Bankers worldwide allowed M3 levels to explode at levels not seen since the mid 80s. Derivative instruments such CDOs, CMBOs and CDO^2, often backed by supposedly AAA rated ABS consisting mostly of RMBS and CMBS were sold to investment managers worldwide. The deflationary effect of a rapid unwinding of overly leveraged financial assets is now contributing to a deflationary spiral of debt destruction which is being hidden by a marked increase in commodity driven inflation, itself driven by increased leverage. The resultant impact of a global loss of confidence may be most easily seen in key measures such as LIBOR and EURIBOR.

Try that.

docs.google.com/TeamPresent?doci … pauth=true

flippingfrenzy.com/2008/10/0 … ow-market/

60 Minutes video with transcript.

Found this through kottke.org

bygonebureau.com/2008/10/01/the-financial-crisis-as-explained-to-my-fourteen-year-old-sister/

If a child misbehaves - the good parent lets them know that they have done wrong and tells them not to do it again. If they do it again, the good parent demonstrates that the behaviour is unacceptable by punishing said child.
This gives the child the message that the parent will not accept their behaviour.
The bad parent, on the other hand, takes the easy route and ignores the behaviour of the child. They give empty threats that the child recognises as such. The punishment is never carried out and the child becomes an uncontrollable brat . The bad parent pays for this many times over.

how about:

The teacher is the regulator
the parents are the Govt
the child the banks
and we are the towns folk

the child is bold but the teacher keeps sending the parents a good report card, even though the parents know the child is bold as they can see its bad behaviour at home.

The childs behaviour gets so bad that one day the arsonist streak in the child takes hold and the kid burns down the town.

The parents and the teacher tell the townsfolk “get to work and re build your town”.