Credit Business Loan and Money Exchange

The results of the meeting U.S. central bank (Federal Reserve) who noted a significant downside risks to the economy responded negatively by the global stock markets. Plus economic data is negative, the global stock market was weaker compact. The fall of global stock markets occurred simultaneously in trading Thursday (09/22/2011), with the MSCI index down nearly 2.5%, approaching its lowest point during the last 1 year. While trading on Wall Street before, they had dropped more than 2%. Index futures on Wall Street has also been opened with the S & P 500, Nasdaq 100 and Dow Jones futures were down between 1.4% to 1.8%.

The decline in the stock market is a negative response from the U.S. central bank meeting. The U.S. central bank after a meeting for 2 days stating the U.S. economy is facing a grim economic forecast. The Fed said there are significant downside risks to the U.S. economy even though they later announced a number of steps to encourage it.

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Many students know that they have an excessive amount of debt only after graduation. Student loans add up to a large chunk of debt that may take years to get rid of. Schools charge more money every year in the form of tuition and fees related studies, and many people rely solely on financial aid to cover their tuition fees and living costs specified. While student loans have no monthly payments until graduation, degree earned after they become due and your budget can hit really hard. Graduates of the very few make a decent income right after college, and the difficulties facing many students who really finances state loan repayment kicks in when the economy does not make it easy either. Fortunately enough, there are two little-known government program was adopted to assist graduates to manage their loans and get rid of debt faster.

Government Grants
IBR or Income-Based Repayment Program is a form of government help aided to help college graduates to repay their student debt. This grant program may help you to pay off or get forgiven some, or even all, of your student debt. Only people experiencing severe economic hardship are eligible to apply. Application is very simple, with chances of success increasing with your ability to furnish proof of financial hardship that affects your ability to make timely student loan payments. With recent economic downturn more former college students are eligible to apply, so it is really worth giving a shot.

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Any business organization has one goal, to maximize profit. The process of maximizing profit is simple. Analyze demand of consumers, and provide appropriate supply, in good quality and quantity. There are however many factors that affect this simple operation. These factors are often classified as macro and micro, internal and external, technical and non-technical. All the same, the sales, production and procurement of the business organizations, directly or indirectly depends on these factors. Hence, you will find that businessmen, closely analyze and ponder upon the economic factors affecting business firms.

Economic Factors Affecting Business
The following article is a small elaboration of the major economic factors affecting business organizations. Internal environment, operational environment and external environment are 3 major classes of such factors. The following list is however a comprehensive and integrated list of all possible economic factors that affect the working of business organizations.

Demand and Supply
The demand and supply are two principal factors that affect the working of any business model. The demand is the will and ability of consumers to purchase a particular commodity and the supply is the ability of the business to provide for the demand of consumers. It must be noted that all the factors that are included in this list are inter-connected. You may also read demand and supply analysis.

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To escape the debt trap of the global bankers, the power to create the national money supply needs to be restored to national governments. Alternatives include:

Legal tender issued directly by national treasuries and spent on national budgets.

• Publicly-owned central banks empowered to advance the nation’s credit and lend it to the government interest-free.
• Nationalization of bankrupt banks considered “too big to fail” (after expunging or writing down bad debts on inflated bubble assets).  These banks could then issue credit to the public and serve the public’s banking needs, with the profits recycling back to the government, defraying the tax burden on the people.
• Publicly-owned local banks (state, provincial, or municipal).

Publicly-owned banks have been successfully established and operated in many countries, including Australia, New Zealand, Canada, Germany, Switzerland, India, China, Japan, Korea, and Malaysia.

In the United States there is currently only one state-owned bank, the Bank of North Dakota. The model, however, has proven to be highly successful. North Dakota is the only U.S. state to have escaped the credit crisis unscathed. In 2009, while other states floundered, North Dakota had its largest budget surplus ever. In 2008, the Bank of North Dakota (BND) had a return on equity of 25%. North Dakota has the lowest unemployment rate in the country and the lowest default rate on loans. It also has the most local banks per capita.

North Dakota has had its own bank since 1919, when farmers were losing their farms to the Wall Street bankers. They organized, won an election, and passed legislation. The state is required by law to deposit all its revenues in the BND. Like with the sustainable model of the bank of colonial Pennsylvania, interest and profits are returned to the government and to the local economy.

A growing movement is afoot in the United States to copy this public banking model in other states. Fourteen U.S. state legislatures have now initiated bills for state-owned banks. The model could also be replicated in other countries. In Ireland, for example, where the major banks are insolvent and are already nationalized or soon will be, the government could deposit its revenues in its own publicly-owned banks, add sufficient capital to meet capital requirements, and leverage these funds to create interest-free credit for its own local needs. That is exactly what Alexander Hamilton did when faced with government debts that were impossible to repay: he put the government’s existing funds in a bank, then borrowed the money back several times over, employing the accepted “fractional reserve” model.

Japan’s solution is also a variant of what Alexander Hamilton proposed two centuries earlier. Japan retains its status as the third largest economy in the world although it has a debt to GDP ratio of 226%. Japan has “monetized” the national debt, turning it into the national money supply. The government-owned Bank of Japan holds Japanese government debt equal to 100% of the nation’s GDP; and because the government owns the bank, this loan is interest-free and can be rolled over indefinitely. An interest-free loan rolled over indefinitely is the equivalent of issuing money.

Americans borrowed more in September to buy cars and attend college, but they charged less to their credit cards for a third straight month. The figures suggest that consumers are growing more cautious about taking on high-interest debt in a weak economy.

Total consumer borrowing rose $7.4 billion in September, the Federal Reserve said Monday. In August, it had fallen the most in 16 months. The September figures reflected a 5.8% increase in borrowing in the category that includes car and student loans. But the category that covers credit card purchases dropped 1% after larger declines in July and August.

Credit card use has fallen nearly 19% since September 2008, the height of the financial crisis. For many consumers, adding debt with high interest rates is too risky when jobs are scarce, pay raises are few and unemployment has been stuck near 9% for more than two years.

The average annual percentage rate on variable-rate credit cards ticked up to 14.46% and was unchanged at 13.71% for fixed-rate credit cards, according to Bankrate.com. Auto loans are far cheaper. The average rate for a 48-month new-car loan was 5.31% last week. The average rate for subsidized student loans was 4.5% last year, according to Student Loan Consolidator.com. Loans not subsidized by the federal government are capped at 6.8% through 2012.

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