As some of you know, I used to think of myself as a basketball player.  You might know me as the economics writer at Cktimes.ca or as an agricultural economist under the Agridome.  However, if I had my druthers I’d be in the NBA.  Needless to say, I will never have my druthers.  Instead I substitute that for every Raptor and Piston game I can watch.

Regardless of my current state, let me tell you, back in the day I was a terror on the hard courts of Chatham-Kent.  I wasn’t any good as a basketball player in organized high school ball.  However, give me a 90-degree day in the summer of 1980 on the Tecumseh High School outside courts and I’d take on anybody.

The point was I still wasn’t that good, but for whatever reason, I loved to play pick up ball and as I grew older I tried more and more things.  One time in my life, I dunked a ball, on the old YMCA outdoor courts, circa, about 1980.

So what was it?  Why was I not a good basketball player in organized play and why did I have so much more success out on the outdoor courts?  I’ve thought about it many times and it boils down to one thing, confidence.  In my younger days I had very little, but as time went by and I hit the outdoor courts, my confidence grew and grew.  In many ways it was night and day.

Fast forward to me being on vacation last week.  While away I met a fellow from Montreal who was a banker.  He told me he was responsible for commercial lending of up to $50 million.  Of course he asked me what I did before I asked him what he did.  So needless to say our conversation soon veered from Quebec politics to the credit freeze in the United States and the economic meltdown.

My newfound banker friend told me that there were big differences between the credit freeze in the United States and in Canada.  I was aware of that, but he reassured me that our banking system in Canada weathered the economic storm much better than our American cousins.  Then he said one of the biggest factors in banking boils down to confidence.  That is lending money and having the confidence that they will be paid back with real money and not the security against the loan.

He then told me that “confidence” is the biggest thing we lack right now.  Nobody has it, but when it starts to come back slowly, it will be the key to economic recovery.  I agreed with him, giving him the explanation that everybody is running around with their hand on their wallet not wanting to spend.

I’ve been saying that for a while now.  In fact, I’ve doing that myself because I’ve been afraid just like everybody else on this continent on what’s coming next.  Cash is king right now and it’s been that way at least for the last six months.  So if you have it, you’re keeping it saving it like you have never done before.  However, it’s killing our economy.  If we really want this economy to recover, all of us have to take that proverbial leap of faith.

With everybody having their hands on their wallet, that’s a bit of a problem, especially when banks won’t lend money.  It’s worse in the US, credit for cars has dried up, or credit for just about any consumer product.  That’s one reason why both the Dow Jones and the Toronto market went up last Monday because President Obama and Treasury Secretary Tim Geithner came up with a new way to get toxic assets off American bank balance sheets.  What they’ve suggested is that the American government take over those toxic assets with the help of the private sector.  Anybody would be able to buy them up with government help.  Essentially a market is being created where private individuals and government hope over time to turn the toxic into perfume.  From the financial markets perspective, its like your broke, then suddenly your scot free.  We’ll see what happens next.

At the end of the day, it’s all about what I had on that basketball court almost 30 years ago.  Simply put a good dose of confidence will bring this thing back.  However, I’m not there yet.  Getting your confidence back after living through a once in a 70-year financial meltdown takes some getting used to.  I’m not there yet.  So you start spending money first.