Global Credit Availability

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Global Credit Availability: In today’s world of personal finance and economics, with the global perspective being the primary focus. Corporations, just like individuals, are looking at expanding their horizons and saving or making as much profit as they can. How do they accomplish this gigantic and often expensive proposition? The answer to this is through credit. However I poise a question to everyone. Is the ease of which to receive credit today a hindrance and detriment to all of us, or is it the answer we have all been looking for? I will show you both sides of this situation and you are the judge. The term credit according to the 1992 issue of New Webster’s Dictionary is; a transfer of goods, etc…in confidence of future payment, to enter on the credit side of an account; to procure credit or honor to (“Credit”). The term domestic credit in the Dornbusch Microeconomics book is the monetary authority’s holdings of claims on the public sector – government debt – and on the private sector – usually loans to banks (“Domestic Credit”). According to our Personal Finance book; “Consumer credit dates back to colonial times. While credit was originally a priviledge of the affluent, farmers came to use it extensively. No direct finance charges were imposed; instead, the cost of credit was added to the price of goods… All economists now recognize consumer as a major force in the American economy… To paraphrase an old political expression, as the consumer goes, so goes the U.S. economy (164).” These terms all mean one thing, as we the public, government, and businesses receive credit, we must be responsible with it and ensure that we repay our obligations. In today’s global economy credit is the single most important tool most consumers and businesses have. Credit when used properly allows us to grow and purchase items we might not otherwise have the funds for. The United States has had credit reporting information and accounting since 1956, and with all of this available information global models are now being created for other countries to follow. It is said that without the use and availability of credit the global econo... ... middle of paper ... ...l. Macreconomics. 9th ed. Ed. Lucille Sutton. New York: NY, 2004. Kapoor, Jack R., Les R. Dlabay, and Robert J. Hughes. Personal Finance. 7th ed. Ed. Michele Janicek. New York: NY, McGraw-Hill/Irwin, 2004 References Cole, R., “The importance of relationships to the availability of credit.” Journal of Banking and Finance. 1998 Fisman, R., “Trade credit, financial intermediary development and industry growth.” Journal of Finance. 2003 Kennickell, Arthur B., Martha Starr-McCluer, and Brian J. Surette, “Recent Changes in U.S. Family Finances: Results from the 1998 Survey of Consumer Finances,” Federal Reserve Bulletin. January, 2000, pp 1-29. Scott, J., “Small business and the value of community financial instituations.” Journal of Financial Services Research. 2004 United States. Board of Governors of the Federal Reserve System. Federal Deposit Insurance Corporation. 10 Nov. 1999 http://www.federalreserve.gov/boarddocs/press/general/1999/19991110/default.HTM United States. Federal Reserve Board. 10 Sept. 2003 http://www.federalreserve.gov/BoardDocs/Press/bcreg/2003/20030910/default.htm.

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