US Federal Reserve Bank Loves Bubbles

August 26, 2010 by Prakash Dhawan · Leave a Comment
Filed under: "Reserve Bank" 

US Federal Reserve Bank Loves Bubbles

The United States Federal Reserve Bank just can’t help itself. It has an apparent love for bubbles, bubbles, bubbles. As soon as one bubble shows signs of deflating the Fed gets busy and creates another.


First it was the Dot Com bubble that was created by the then Chairman of the Fed, the one and only maestro bureaucrat, Alan “Bubbles” Greenspan of irrational exuberance fame. What a spin master. It was Mr. Greenspan whose actions largely created the bubble during the Asian currency crisis of 1997 and 1998. World financial markets were flooded with liquidity as Alan and the Fed panicked and turned on the cheap credit money making machines to flank speed, damn the consequences.


The consequences made a lot of people think that they were rich. At least for a while. Who would have thought that a great deal of that excess liquidity rammed into financial markets would find its way into the stock market and fuel the Dot Com bubble? Certainly not Alan Greenspan. What an era. Twenty something hip techies with a business plan jotted down on a napkin could raise billions over a three martini lunch.


Well, it was fun while it lasted. The downside wasn’t so pretty as investors and hard working people who had invested in their companies 401K plans suddenly found the value of their holdings not only approach zero but in some cases hit zero, all within a year or two after the Fed created bubble popped.


After the 9/11 tragedy the Fed once again panicked. This time our esteemed Bubbles guy, good old Alan, brought rates down to 1% and kept them there for a very long time. Oh boy! Another bubble is created. This time a good bit of that excess cheap money found itself into real estate markets. Up , up and away prices went. After all home prices can only go up and up and especially in California, and Florida, and Las Vegas, Nevada, then go up some more, right?


What a party, an orgy really. Homeowners across the nation, thinking they were rich, began to suck billions and billions out of their homes in the form of lines of credit and home equity loans secured by the homes that were increasing in value in the bubble real estate market at the rate of 15%, 20%, 25% and more a year.


This was a great game. You could use your home like an ATM machine and run out and buy a new SUV and a huge flat screen TV. And millions of Americans did just that and more. Surprise,

Tags: , , , ,

Bank Business Loan – is a Bank Business Loan the Answer?

August 21, 2010 by Prakash Dhawan · Leave a Comment
Filed under: "bank" 

Bank Business Loan – is a Bank Business Loan the Answer?

It is a fact that at one point in time or another nearly all entrepreneurs need a bank business loan, either to start up the enterprise, expend it, or to bridge difficult times when the consumer turns fickle. Of the many lenders and types of loans available, a bank business loan will probably be the best bet for starting the venture. A bank business loan is often the best way to establish and maintain your venture’s credit rating, if it is fastidiously repaid.

But, if you are experiencing financial problems, is a bank business loan a good idea to use to get current on the debts? Just what is a bank business loan and what is the application procedure? A bank business loan is an unsecured loan that does not require collateral of any kind. It is based entirely upon the credit rating of all of the involved partners; the prospectus or the plan that was developed that outlines the venture, including both the financial liabilities and the anticipated income. You will have to provide well-organized and scrupulous detail, together with a good credit rating for this type of loan. A bank business loan is the primary vehicle for starting up an enterprise and gets a venture off to a good start, however it is a poor remedy for existing financial problems.

It is far better to obtain professional advice on how to deal with your financial problems. The first thing that a qualified business debt consultant will want to know is the type of loans and financial obligations make up the entire situation. If you have unsecured debts, especially a bank business loan, there is quite a bit the consultant can do to make things easier for you to repay your business debt, continue running your venture and even improve your credit rating. One solution that may be proposed is business debt consolidation, which consolidates all of the financial obligations into one account that requires just one affordable payment per month. This has been worked out by the consultant together with all of the creditors who have agreed to accept a reduced payment that is based upon a lowered interest rate.

If the financial obligation is more problematic and either represents a large amount, or has become delinquent, the consultant may recommend business debt settlement. This form of financial relief is aimed only at unsecured loans such as a bank business loan and business debt settlement can be effected in a couple of

Tags: , , ,

« Previous Page — Next Page »