Credits are my specialty, today I am going to talk about what the percentage of different credits actually is and how these percentages should be created under free market conditions, but as a non-captive market, these percentages do not reflect the real risks involved.

In lenders and borrowers

In lenders and borrowers

So, in a free market, credit interest rates should stabilize in their own right, investors would be willing to offer optimum rates to attract the most clients and earn the highest returns when advising the risks involved. In this way, the right interest rates would be set at which the companies would remain large, but for the purposes of competition these rates could vary slightly. But at present, such rates are more than supply and demand, as it should be, but how cheap credit institutions are to borrow money from the National Central Bank, and because the cheaper the borrowing is, companies can afford cheaper and lower interest rates. set up Such actions on the part of the state are called monetary policy and thus affect economic growth following Keynes’ economic theories.

Low interest borrowings are very risky

Low interest borrowings are very risky

But what the government has not understood is the fact that such low interest borrowings are very risky and people are often not able to afford them, but because these percentages are so small, such as a loan can be ignored. A good comparison would be if a person who is overweight and who is unable to refrain from overeating would offer 10 pizzas for free and, in addition, offering these pizzas, we would send him a special email that they are available or call and offer , or he doesn’t want these pizzas.

What do you think will happen? In 99% of cases, a person will take these pizzas and eat them, although in reality he had consented to being on his diet and finally having to get rid of this excess weight. So that’s exactly what the banks are doing now, when they are offered such cheap loans on the part of the government, then they want to make that money for their customers with low interest payments to earn from them in the long run. And, banks use a variety of methods ranging from emailing to simple calls to offer their customers loans and most likely that a large proportion of these people then also agree and borrow because they are unlikely to have a good chance.

Easily accessible loans are overweight because they do more harm than good

Easily accessible loans are overweight because they do more harm than good

And so there are also various problems, as easily accessible loans are overweight because they do more harm than good to drive common consumer prices and drive consumers into even bigger debts, which will be harder and harder to get out of then. If the Latvian bank had no monopoly on money creation, then any bank could make money and such monetary policies would not be possible and then the credit market would stabilize itself, investors would not want to risk their own money by giving such small credit interest. rates and so would not have so much credit offers and the overall lending industry would certainly decrease.

But it will certainly not happen because the government wants to control everything and will not allow a completely free money market to exist, always with arguments that it will be too unstable and risky. investors would not want to risk their own money by giving such small credit interest rates and so would not have much credit offers and the overall lending industry would certainly decrease.

But it will certainly not happen because the government wants to control everything and will not allow a completely free money market to exist, always with arguments that it will be too unstable and risky. investors would not want to risk their own money by giving such small credit interest rates and so would not have much credit offers and the overall lending industry would certainly decrease. But it will certainly not happen because the government wants to control everything and will not allow a completely free money market to exist, always with arguments that it will be too unstable and risky.

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