When we have prosperity in the United States, usually as a result of extended periods during which interest rates are relatively low, it is possible for ANYONE to succeed. Our markets are so vast, our citizens so effluent, our institutions so liberal, that practically every form of commercial activity has a theoretical and statistical chance to succeed. The problem with that scenario is that good times cause millions of would-be entrepreneurs to enter the market place. Success becomes a very competitive venture in which those with true ability are virtually indistinguishable from those without the skills and knowledge normally required as a prerequisite to prosperity.
In hard times, the reverse of the above holds true. Slowing economic activity causes businesses to retrench. The faint of heart drop out, others cut back on costs, materials, labor. They slow down their payments to the banks. They withdraw surplus funds to meet current expenses. Bankers, seeing their reserves beginning to diminish, are faced with increasing loan demand from borrowers who foresee less and less certain profits with which to repay them. Interest rates are increased to meet market demand for money. Loan terms are stiffened to discount increasing risk. Money becomes tighter and tighter. THIS IS WHEN THE BEST OPPORTUNITIES HAPPEN!
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