Isn't Interest a Curse ?
If you ask a banker, economist or a politician the reason for this recent and continue world economic meltdown the answer unanimously will be “irresponsible lending to real estate sector” however the real reason of this economic crises or any in past or if any in future is same but surely it is not the real estate sector.
From centuries the people have been blinded with the curse of interest. The truth is that the global financial system is simply crumbling. This is the horrifying truth whether we like it or not and it is only due to manmade financial systems that this financial meltdown has occurred.
The situation has worsened so much that some experts are even predicting the likes of another incident like the great depression of 1929. And in order to avoid such mayhem, the US government has undertaken laudatory steps to save the financial sector from total collapse. The Senate and the House of Representative have approved the $700 billion bailout plan by Treasury Secretary Henry Paulson. It is a good and an aggressive move but we should really ask ourselves why such events happened to big financial institutions anyway? Should the big financial institutions have any financial problems even after being run by the world's most renowned people with extra ordinary qualifications from various top ranked universities around the globe? Well, it proved again that no matter how good finance people might be, man made financial system can also crumble.
A recent report shows that amidst this crisis, American International Group Inc spent $440,000 on a posh California retreat for its executives, complete with spa treatments, banquets and golf outings, according to lawmakers investigating the company's meltdown. AIG took $85 billion loan from the government in order to stave off bankruptcy. It is sad to hear that people still do not learn from mistakes. How could a bankrupt company send its executives to resorts for fun? Will we ever take any didactic lesson from this incident?
It is understandable why these financial institutions face bankruptcy. Financial systems all over the world are more or less the same. Banks and financial institutions trust each other and therefore, easily lend to each other without much concern. They lend money with confidence. But when this confidence, which is nothing but faith, breaks down, banks stop lending to each other. This is exactly what is happening now. The financial system is not sure who holds what in terms of the toxic mortgage assets and are therefore suspicious of lending to each other.
But we all are missing the main point. We all fail to understand the most crucial thing that plays a vital role in the destruction of today's financial system. It is due to nothing but the interest that banks implement on the borrowers. No one is talking about the curse of interest that is destroying the leading financial institutions of the world. As long there exists high interest rates, this type of mayhem will continue to happen. A country or a company or even a person can never move towards prosperity through interests.
We talk about how we can overcome this financial turmoil that is making the governments crazy but we somehow miss this crucial issue of interest. Interest is a curse, it can never bring prosperity to any society and after realising this fact, and the world's central banks have recently announced coordinated interest rate cuts as they try to restore confidence in the economy. Like US, Britain also announced a three-part multibillion-dollar bailout for its troubled banks. Eight of Britain's banks will be part-nationalised. Then the Federal Reserve Bank of US reduced its key rate from 2 percent to 1.5 percent. In Europe, the Bank of England cut its rate by half a point to 4.5 percent, while the European Central Bank reduced its rate to 3.75 percent. It is the same case with other central banks in Canada, Sweden and Switzerland.
China also cut its key interest rates to stimulate the slowing economic growth. Russia agreed to negotiate a four billion Euro (5.4 billion dollar) emergency loan to help Iceland fight against national bankruptcy.
These are just a prelude to what is about to come if we do not take stern actions starting now. We must understand that as long as high interests control our financial systems, incidents like the great depression can easily be prognosticated in future. Financial troubles will again hamper our lifestyles
If we do not learn the impacts of interest then this present financial meltdown will scarcely impinge our consciousness and we will keep on facing this turmoil again and again.The "bailout" proposed by the US Treasury does not constitute a "solution" to the crisis. In fact quite the opposite: it is the cause of further collapse. It triggers an unprecedented concentration of wealth, which in turn contributes to widening economic and social inequalities both within and between nations.
The levels of indebtedness have skyrocketed. Industrial corporations are driven into bankruptcy, taken over by the global financial institutions. Credit, namely the supply of loan able funds, which constitutes the lifeline of production and investment, is controlled by a handful of financial conglomerates. In a bitter irony, the engineers of financial disaster are now being considered by President-Elect Barack Obama's Transition Team for the position Treasury Secretary.
If this is not because of wide spread use interest and abuse of wealth then what is?
I would like to know your comment please feel to discuss and comment on the issue your opinion will enlighten me and others.
Written by: Adam Khan
From centuries the people have been blinded with the curse of interest. The truth is that the global financial system is simply crumbling. This is the horrifying truth whether we like it or not and it is only due to manmade financial systems that this financial meltdown has occurred.
The situation has worsened so much that some experts are even predicting the likes of another incident like the great depression of 1929. And in order to avoid such mayhem, the US government has undertaken laudatory steps to save the financial sector from total collapse. The Senate and the House of Representative have approved the $700 billion bailout plan by Treasury Secretary Henry Paulson. It is a good and an aggressive move but we should really ask ourselves why such events happened to big financial institutions anyway? Should the big financial institutions have any financial problems even after being run by the world's most renowned people with extra ordinary qualifications from various top ranked universities around the globe? Well, it proved again that no matter how good finance people might be, man made financial system can also crumble.
A recent report shows that amidst this crisis, American International Group Inc spent $440,000 on a posh California retreat for its executives, complete with spa treatments, banquets and golf outings, according to lawmakers investigating the company's meltdown. AIG took $85 billion loan from the government in order to stave off bankruptcy. It is sad to hear that people still do not learn from mistakes. How could a bankrupt company send its executives to resorts for fun? Will we ever take any didactic lesson from this incident?
It is understandable why these financial institutions face bankruptcy. Financial systems all over the world are more or less the same. Banks and financial institutions trust each other and therefore, easily lend to each other without much concern. They lend money with confidence. But when this confidence, which is nothing but faith, breaks down, banks stop lending to each other. This is exactly what is happening now. The financial system is not sure who holds what in terms of the toxic mortgage assets and are therefore suspicious of lending to each other.
But we all are missing the main point. We all fail to understand the most crucial thing that plays a vital role in the destruction of today's financial system. It is due to nothing but the interest that banks implement on the borrowers. No one is talking about the curse of interest that is destroying the leading financial institutions of the world. As long there exists high interest rates, this type of mayhem will continue to happen. A country or a company or even a person can never move towards prosperity through interests.
We talk about how we can overcome this financial turmoil that is making the governments crazy but we somehow miss this crucial issue of interest. Interest is a curse, it can never bring prosperity to any society and after realising this fact, and the world's central banks have recently announced coordinated interest rate cuts as they try to restore confidence in the economy. Like US, Britain also announced a three-part multibillion-dollar bailout for its troubled banks. Eight of Britain's banks will be part-nationalised. Then the Federal Reserve Bank of US reduced its key rate from 2 percent to 1.5 percent. In Europe, the Bank of England cut its rate by half a point to 4.5 percent, while the European Central Bank reduced its rate to 3.75 percent. It is the same case with other central banks in Canada, Sweden and Switzerland.
China also cut its key interest rates to stimulate the slowing economic growth. Russia agreed to negotiate a four billion Euro (5.4 billion dollar) emergency loan to help Iceland fight against national bankruptcy.
These are just a prelude to what is about to come if we do not take stern actions starting now. We must understand that as long as high interests control our financial systems, incidents like the great depression can easily be prognosticated in future. Financial troubles will again hamper our lifestyles
If we do not learn the impacts of interest then this present financial meltdown will scarcely impinge our consciousness and we will keep on facing this turmoil again and again.The "bailout" proposed by the US Treasury does not constitute a "solution" to the crisis. In fact quite the opposite: it is the cause of further collapse. It triggers an unprecedented concentration of wealth, which in turn contributes to widening economic and social inequalities both within and between nations.
The levels of indebtedness have skyrocketed. Industrial corporations are driven into bankruptcy, taken over by the global financial institutions. Credit, namely the supply of loan able funds, which constitutes the lifeline of production and investment, is controlled by a handful of financial conglomerates. In a bitter irony, the engineers of financial disaster are now being considered by President-Elect Barack Obama's Transition Team for the position Treasury Secretary.
If this is not because of wide spread use interest and abuse of wealth then what is?
I would like to know your comment please feel to discuss and comment on the issue your opinion will enlighten me and others.
Written by: Adam Khan
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