by AC
I’ve got a splinter in my mind that’s driving me nuts, and it’s about banks, interest rates, and inflation.
So back in 2008, banks and insurance companies were negligent, greedy, and irresponsible and almost crashed the global economy to the point where tax payers had to bail them out for fear that it would bring us all down. Did the bankers learn anything? nothing other than that they can do whatever they want and the people will bail them out. Bonuses still got paid out, and the beast kept moving along.
Fast forward to today, and we have had to deal with a pandemic that once again put a hurt on the world economy, and world leaders saw no way out but to print money and keep the economy limping along until we could get past the pandemic. The result has been record inflation as our currencies are devalued due to the increase in the money supply. The fix for this Increase interest rates in order to slow down runaway inflation! This does work, but it hurts a lot of people in the process. It is funny, though, that with interest rates rising, there is one clear profitable winner in this situation, and it is the banks, insurance companies, and money managers that reap the rewards of the interest rate hikes. This is basically our leaders saying that our inflation problem is the people’s fault, so let’s take some of that money from them to even things out and give it to the banks! Why do the banks get to benefit from the interest rates being forced upwards due to poor policy and planning on the government’s part?
How is it that banks, who have no real product to sell unless we give them money in the way of deposits, can act irresponsibly and benefit from taxpayer bailouts, and when bad policy creates financial hardships, they once again benefit? They can’t lose!
Maybe those who lose their homes due to interest rates rapidly rising should be bailed out by the banks? The tax payers were forced to bail them out when they proved to be poor stewards of the economy in 2008, so maybe it’s time for some payback, or at the very least we should not allow them to profit from this situation.
The system is broken and rigged against us, and this example here shows it clearly in my mind. I know this is a very uneducated and simplistic view of the situation, but this is how I am seeing things lately. Change my mind!