Credit Crisis

Well, we to allow trying to keep this simple one, because this removes a lot of people. That is because the media did it a complex problem that is in very basic fact. There are no the things such as liberates money.

If you will have given a loan, you should be able the return pay, and you should be able raisonablement to prove that you can pay it return when you done a request of him. The lenders load with the interest rate to compensate their delay of can use this money for their own goals of purchases of the things they need or desires -- that is, a delay in the "consumption".

That is not "your" money -- his other money of the people that you use with their permission for that you can obtain your own ends. Nevertheless, the banks that had limit itself to Wall Street, and on the federal American government order, created financial diverted instruments that were based on the capacity of borrowers of loan of hypotha¨que of "subprime" to pay return their loans. Bad movement. What a small stunning group! The low interest rate, low inflation, and the easy credit.

Themselves they were going to be been forced to lend to the risk, these lenders were not going to break their head and proposed the manner more easy to earn money never known! Never before being the there low risk married to the big reward. .. Goal it all depended one on an assumption, and that the assumption basically revealed itself precarious brokers and faux.banquiers and the hypotha¨que plotted them together to leave recently bad risk are re-conceptualised as the big customers.

Under the pressure to stop is "prejudiced against" the borrowers of poor risk, the lenders saw for him that the highest borrowers of risk returned them able to load with HIGHER proportionnedment interest rate, and more and the more fresh tops. Then, they would turn themselves and sell the loan of the institutions little soupasonneuses.

Now, this is not necessarily bad. The it could be dangerous, but not bad. But what does this bad one, besides the transparency lack because of all the levels of use, is that the this is all were constructed on this defective assumption and not very realistic: that the people that have difficulty paying return of the loans will pay return of a manner or of another the special loans that this all were!

You see, if you have a lot of monies to launch at random, you can go a broker these days and put $1 million; this quantity can right away is used to right for at least $3 million. To result it $4 million -- you have now $1 millions of value of equity and $3 millions of values of debt -- then can be invested in a funds basket that will turn itself and uses this $4 million several more time. .. And it just soars without relaxs. But to suffice it to say, that $1 million that the individual easily put could turn in $100 million, with $99 millions of him all debt.

If you done a bad movement, you have now $99 million. Under this type of use, you can qualify for an account of lean margin if you have the big credit, but if you have the poor credit -- and now, more and more of world to do -- you will have forced to the pony in top more of money for your margin account to keep the opens and the operation.

HOW CAN YOU SURVIVE THIS CRISIS OF CREDIT?

Well, the stop doing that all the Jones do! You should not are idiot. Why should you be on the hook for the money that you cannot pay return? Why to go for a big account of margin when you can use a small the one for the big gains?

Why to invest in these credits totally of risky subprime used accounts when you can learn to invest in the basically solid index, the index that can do you the money without taking account of if the market ends on or down below on the given day?

Why not to count on the true world of true markets to change, to earn money? The credit crisis was caused by the roaming investors of the basic principles. You can return to these basic principles with the contracts d'E-mini-avenirs.