Essentially, my position was that the great religions were right—usury was such an evil that proclaiming it a sin was central to their moral teachings on economics. But (being the centrist that I strive to be) IF you were to allow the charging of interest, it should at least have some relationship to the needs of the real economy. This meant that there was a reasonable method for setting interest rates that didn't harm the real economy. Those rates would be more like 0.25% than 21% and when conditions were appropriate, interest rates would actually turn negative.
Well, it took 30 years but we are beginning to see negative interest rates. The plundering of the banksters has taken such a toll that there is almost no Producer activity left that reliably makes money—so positive interest rates these days are essentially absurd—because they killed the goose that laid the golden egg. Of course, the next logical step after negative interest is for debtors to declare a moratorium on payments and watch the collection efforts become mired down in the flood of defaults.
French president: zero growth so far this yearBy MASHA MACPHERSON
PARIS (AP) -- France enjoyed a boost in investor confidence with a successful bond auction Monday - but also got a warning from the president that growth so far this year is "nil" and that the country needs to rethink its social model.
France's government sold (EURO)6 billlion in short-term bonds at negative interest rates Monday, as investors flock to the perceived safety of Europe's larger economies. It was the first time rates entered negative territory, according to the French Treasury.
France's borrowing costs have been dropping in recent months as those in neighboring Spain have soared and raised fears that it, too, will need a bailout.
France, the No. 2 economy in Europe, has high debts of its own and 10-percent unemployment, and is struggling to avoid a new recession. more