If the cost of money turns up higher or will be raised to a level higher than the inflation rate on our products, then we must stop hoarding and start selling our stocks. If central banks use their monetary policies to raise interest rates as a means to check inflation, then we have no choice but to pay our loans and interest-bearing borrowing. Those who represent economies with large investments in financial markets will opt for an increase in rates to prevent further loss of their money’s value in financial markets resulting from inflation. If an economy is deriving four times more volume of business from financial markets than from the production of real goods and services (GDP), you can be sure the central banks of these economies will protect their financial markets more than they will protect their markets for real goods and services, when squeeze turns to crush. On the other hand, central banks which represent economies more focused on the growth of their real economy-GDP and Current Account Balance-than growth and yield in their financial markets, will stick to an increase in interest rates just high enough to prevent speculative fever in commodities and goods but low enough to prevent closure of factories, unemployment and recession. read more

Filed in: Cash Loan For Newly Unemployed