The U.S. is headed in the wrong direction
- By Wasfi Samaan
- Published 02/7/2009
Many of us around the world are seeing a slowdown in the economy but none like the United States. Many factors played a role in the collapse of the most powerful nation in the world. I say collapse because the system that the United States was founded on is gone. The american dream of hard work is gone.
Don't get me wrong there are still many opportunities to make money but it is only limited to the few. When my family immigrated to the U.S. in the late 70's, there was many opportunities especially in starting a business. There wasn't much competition and margins were good. Now we have to much of everything, we have to many restaurants, grocery stores, malls, convience stores, car dealerships, drug stores, etc. With easy credit the U.S. allowed to create fake demand for everything. Not everyone should own a home, a new car or go out to eat at a fancy restaurant but with easy lending standards and credit cards that you only pay the minimum on, this was created.
I don't want to dig down too deep in the collapse but the other factors are the investment banks selling C.D.S. (edit default swaps)
org/wiki/Money">money if one of the specified events occur. Don't get me wrong there are still many opportunities to make money but it is only limited to the few. When my family immigrated to the U.S. in the late 70's, there was many opportunities especially in starting a business. There wasn't much competition and margins were good. Now we have to much of everything, we have to many restaurants, grocery stores, malls, convience stores, car dealerships, drug stores, etc. With easy credit the U.S. allowed to create fake demand for everything. Not everyone should own a home, a new car or go out to eat at a fancy restaurant but with easy lending standards and credit cards that you only pay the minimum on, this was created.
I don't want to dig down too deep in the collapse but the other factors are the investment banks selling C.D.S. (edit default swaps)
CDS contracts have been compared with insurance, because the buyer pays a premium and, in return, receives a sum of
In addition to people buying homes they could not afford. Many homeowners were able to state their income without verification. So the bank or the mortgage broker would tell the customer that you could just tell us what you make and we will take that without verification. In addition the person appraising the property was under pressure to make sure the appraisel matches the purchase price.
During all this mess gas prices were escalating to $4.25 plus a gallon in a short period of time. This had the biggest impact on someones pocket books. It helped increase the cost of doing business therefore affecting many businesses.
The U.S. keeps digging a bigger hole because everything they are doing seems not to work. The only way that you can create jobs is thru the small business owner and the small business owner needs capital at a cheap rate to be able to grow. They also need to be able to borrow without putting any money down.
There are many smart business owners that can create many different businesses if given the funding at a competitive rate and a long amortization. You will see that many of the stimulus actions taken by the U.S. governement are not going to work.
One good thing about a slow down is that the companies that survive will thrive after the slow down. The recession is going to close many companies and create many opportunities when everything turns around. I feel that unemployment in the U.S. will reach 9.5% and will start to turn around in September of 2009 at a slow pace.