1. Why are you leading our financial institutions to sure shot disaster by forcing them to reduce interest rates and lend. Isnt it basic economics that when there is a scarcity of capital Interest Rates will go Up and not Down? Isnt it also basic economics that in order to attract more capital that is desparately needed , Interest rates have to remain high.
2. Don't you realise that our banking system was safer than the those around the world only because of our regulations and safety net available in terms of the higher reserve requirements . By loosening these right now , when there are plenty of bad apples in the system, arent you putting the entire system at risk in the medium and long run?
3. Why are you offering lifelines for institutions that are sinking primarily because of their mismanagement and bad business practices ? Allow these to fail in order to cleanse the system and start building from a fresh base. Increased credit can a good mantra but only after cleansing the system of the rot. Otherwise money will only flow to these rotten apples and as a result the system will be in deeper trouble.
4. Hasnt this path of reducing rates/ Increasing liquidity led the developed economies to the state they currently find themselves in? Why are we treading the same dangerous path?
5. If within the system, most participants have behaved rationally while a minority has committed excesses, by trying to save this minority , are'nt you penalizing the majority?
Recession, Depression, Slow Down or whatever you may call it.. These are all part of normal economic cycles . They are like medicines to cure the system of its excesses. By trying to artificially prevent it and trying to save all the constituents of the system, you are actually putting the system at greater risk of collapse . Monetary and Fiscal stimulus is warranted. But only after the system has undergone cleansing and the inefficiencies weeded out
1 comment:
What are you doing, not being the FM of this country?? no, am not joking!
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