Catastrophe of bank interest rates – 16

Continues from the previous post -

At present, we are shifting center of money to banks. That is most suitable for this gambler group. Naturally, center should be with public. Because when center is at public, money movement is normal and helps "Real economic group" borrowers who are the core of economy. When this center shifts to banks, free movement of money will be stalled. All worlds have been infested by this gambler group, players in money market. This is a very serious situation. This looks like a deep-set conspiracy to control money. Frequent devaluation of currency is one more bad effect of all activities of this dangerous category. If these are not stopped in time, economy of the world will be paralyzed. In fact this has already started. Gambler group is like cancer and it keeps growing until economy of that country is finished. American economy has already reached that level even though they do not want to accept it. Some times, it looks as if there is no return from the effects of activities of this category. Indian economy must protect itself from this cancer before it is too late.

Now we should see what happens if economic center is with public. More money in the hands of public means more business to market. So long as there is money with public, it is spent. By that phenomenon, market of sorts keeps on benefiting. As market benefits concerned business improves. Public has varied interests and according to them, those markets and concerned businesses improve by its support. When interest rates are decreased, public spends less money. This has cascading effect on all forms of markets. This decrease in business affects "Real economic group" borrowers and their activities. Less demand for their products makes it difficult to pay interest on their loans. One report recently published on RBI web site explains this. It says, for every one percent reduction in interest rate on deposits there is 4.3 percent increase in loan defaulters. This explains how reduction in interest rate on deposits negatively affects business (sells) and economy. If public does not have enough money in their hands to spend, market has to suffer. Who benefits by this reduction in loan interest reduction? The only group benefits is gambler group. They get cheap loans or at times free money to play their gamble, speculations, black market activities so on and so forth. This group does not have any contribution towards GDP since their activities do not contribute to any production.

Continues in the next post –

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