Monday, April 3, 2017

Catastrophe of bank interest rates – 6

Continued from the previous post –
First two categories earn money out of that investment and that earning used to pay back loan as well as interest on it. Therefore, those loans are self-supporting loans. Third category does not earn from that loan. Therefore, to pay back it has to arrange for it from some other source of money; therefore, this third category is burden on banks. Recovery of such loans is many times a problem. However, they insist for lower rates of interest on their loans on humanitarian grounds. Here we should note that no humanitarian grounds are provided to justify higher interest on deposits. Depositors are also from similar class of people from which third category person comes. We can say with surety that all interest policies are lopsided. Policy makers never come with any acceptable justification on this lopsided policy.
We shall take one by one these thirteen types of borrowers and see why they borrow and how interest rate matters or not matter to them. Interesting part is that all these three categories prefer to have lower interest rates on their loans and so they form lobbies at various levels to pressurize authority to reduce interest rates on bank loans. Unlike this, bank depositors do not have any genuine representative body to represent their problems. As a result, we experience steady reduction in interest rates on bank loans and due to that steady reduction in deposit interest rates. This is happening all over the world where American style economics is in practice. One fictitious representative body to represent interest of depositors has been created by malicious methods by gambler groups. This bogus representative body of depositors never does anything to put up depositors problems to the authority; as a result, demands of the three borrower groups continue to benefit and depositors keep suffering. This must stop. That means one borrower has more tactical strength over 90 depositors just because these 90 are not united to voice their grievances. The benefit competition we see in these two groups (borrows verses depositors); all over the world; often depositors losing ground. Most economic ailments are centering on this insistence for lower interest rates on loans. Unfortunately, so-called economic experts knowingly neglect this relation between economic ailments and lower interest rates on loans and depositors. They are found giving fictitious excuses to explain economic ailments and avoid discussing on the lowering rates. To remedy this, bank depositors will have to from a strong pressure group comprising of honest observers who shall expose the falsity of various economic theories propounded by experts of gambler group. Sometimes we notice that some representatives (MPs) come up to support them but at the last moment they shy away, may be because they are compromised with, by gambler group agents. This has been our experience so far.
Continues in next post –
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