Jonathan Jarvis put together an excellent example of how using visualizations to explain something that appears to be too complex and complicated to the average person will really make it quite simple to understand. I think this is the best explanation I have ever seen of the credit crisis.

I will say this - I noticed that he did not cover the next chapter - bailouts and stimulus packages from the government. That is the part I am still trying to get my head around. How does it make sense for the Federal Government to let all of these ticking time bombs end up in their hands? It doesn't change what they are and it doesn't hold anyone accountable for their actions.

Does the Federal Reserve, Congress or the President have the ability to "defuse" them? From what I can tell, the only thing that has happened is that another layer has been added but the outcome will still be the same - or maybe even worse. There are only two options available - "print" money or raise taxes in order to extinguish these ticking time bombs.

Unfortunately, that just creates another, more complicated, incendiary device. "Printing" money means increasing the money supply by either issuing Treasury bills and notes or by lending to banks (i.e. - debt). No matter what, when more money enters the market, every dollar in your pocket becomes worth less unless we are able to increase our "output" proportionally. If we can't, the net result is inflation (a silent tax).

Of course, the only way our government can pay off this debt and the interest that accrues on that debt is through it's primary source of income - taxes. So if debt increases, so do taxes. Which leads me back to the question I had before. Are the bailouts and stimulus packages all really defusing the credit crisis ticking time bombs or are they just re-tooling them into much bigger, more destructive time bombs that simply have longer fuses?

I really hope Jonathan Jarvis can come out with another video that will help the average American understand this because I have a feeling that what is going on right now may not work out.