Readers Question: WHAT ARE THE PREDICTION FOR THE DOLLAR $ AGAINST THE EURO FOR 2009? 2009, will probably see both EU and US economies enter into recession. So far, the EU has been slow to cut interest rates; it has given greater prominence to the spike in inflation rather than the slowing economy. However, the …
Readers Question: 1. The government puts a lot of money into banks who over-lent funds. So why are the banks still lending out money for mortgages? Many banks overstretched themselves. They lent a high % of their assets. For example, Northern Rock’s asset to loan ratio reached 44%. It means for every £1 of loan, …
Readers Question: Assuming that corporate executives are to blame for the current financial crisis, what would be some of the reasons why they are to blame? The main reasons for the financial crisis include: Mortgage companies ignoring ability to pay and taking unreasonable risks in lending high income multiples to subprime customers. Some examples of …
The government has announced a bold move to buy upto £50bn worth of shares in major UK banks. The cost will be borne by the UK taxpayer and averages at around £2,000 per UK taxpayer. £50bn is a huge sum for the treasury when you consider the annual NHS budget for 07/08 was £89bn. The …
The House of Representatives voted against the initial $700bn bailout. Though some bailout is likely to go through in a different form. The Problem with the bailout was: Buying worthless assets, won’t solve the causes of the credit crunch. It won’t solve the problem of home repossessions, falling house prices and the fact banks have …
In response to an essay on – Is a Dollar collapse likely? These are some readers questions “US debt is high, but so is European debt”. Could you perhaps elaborate on that or point me to articles that discuss European debt? National debt in EU countries is a real problem. Countries like Italy already have …
Readers Question: Should we worry about water running out? In a way, water is a renewable resource. From a global perspective, water is almost infinite in supply. However, there can be serious water shortages in local areas. This is becoming an increasing problem due to population growth, climate change and rapid economic growth. Also, it …
After several years of rapid growth, 2009, will prove a testing year for India. Inflation Inflation continues to pose a threat. Inflation peaked at 12% in early August ’08. Inflation, is being caused by rapid growth (demand pull factors) but, also the cost push inflation factors (rising oil prices). Hopefully, the fall in oil prices …