Weak Dollar, Tight Credit

The author outlines two main reasons behind a ‘credit crunch’. Financial institutions are more reluctant to lend credit mainly for fear of not making profits due to the weakness of the dollar and because it is very likely that the Fed will lower interest rates. This is a serious dilemma because with the decrease in interest rates, investment is supposed to increase but if financial institutions are not willing to give out the money, it will be hard to boost the economy, especially through the expansion of small businesses.