Thursday, 13 December 2012

LOANS AT 5% APR.



FIVE PERCENT ! YOU'LL STARVE, YOU BRAT, UNTIL
YOU PAY 4,500%. OR IT'S PRISON FOR YOU !

The cap on loan interest and charges should be 5% because:

1) Money is too expensive; with annual rates from 3% to 36% for bank and credit-card loans and without limit for payday loans, now typically charged at 1,500% to 4,500% per annum. The money economy is stuffed full of jobs that should be automated - employing approximately 4% of the workforce (this is more jobs than in the health services). Charging 5% maximum, with Base Rates for banks at 0.5%, gives the lenders 90% profit; which is bigger than for almost any other business.

2) Bad debts ruin good economies; the present rates are set by banking cartels and pitched at the absolute maximum that markets will tolerate. Inevitably millions of people default, which creates another entire industry of debt-recovery. Hundreds of thousands are dragged through Courts, bankrupted, made homeless and suffer family breakdown. Bad debts from unaffordable loans are a huge attack on stable economies. 

3) Usury is a sin; all major religions ban high interest rates, whose destructive power has been formally recognised for more than 5,000 years. Low life money lenders are not a new problem. If you have no religion, common humanity and personal ethics should make you revolt against this social evil. Who among you will admit to making such loans or admiring those who do. Take a moral stance.

4) High rates accelerate unearned-income inflation; most inflation of prices is driven directly by the cost of money. The higher the rates, the faster inflation rages. This is due to the fact that almost all consumer prices are the top layers of about 15 stages of production - and stages of some services. Each stage is financed seperately as goods proceed from mines, farms and raw materials, to manufacturing, to layers of distribution, to shops and finally to customers. This layer cake of costs typically conceals heavy finance costs in the final price. High interest dramatically increases prices. Low interest capped at 5% will reduce most prices, world-wide, by about 25%.

5) High rates dissuade banks from lending to small businesses; why lend to SMEs at 7.5% when banks can force the business owners to apply via credit cards at 36%. Small businesses, globally, employ 60% of the workforce and are the bones and engine rooms of all economies. A 5% cap will make loans and capital available to them. 

6) Loan-sharks create human misery; the facile and glib spokepersons for this vile "industry" trot out erroneous statistics to prove how happy their customers are. The grim reality is that borrowers are forced by hunger and survival into borrowing a few hundred dollars - and are thereafter entrapped. An English "customer" borrowed £750 and repaid £90,000 over 15 years of being (legally) bullied every week before a court discovered the loan-shark was not licensed by The Bank of England - and broke the poor man's chains. Is that the sort of society you want.

7) Loan-sharking was against the law until 1980. Both in the UK and USA it was illegal to charge more than 30% - which was itself an evil charge. Lenders did go to prison in the days before The Free Markets.

ACTION - All countries should impose a 5% cap on interest and charges - effective immediately. Give the victims a break - before Christmas. Write to your elected representative now.  

Stella Creasy, a Member of Parliament in the UK is pushing for a cap - but the villains have already shelved the initiative for 2 years - while they squeeze and bully families all the more - with the full backing of Her Majesty's Government, Courts, Police and Bailiffs, with powers to throw families out on to streets this winter. Do you have the courage to go to their aid?  END OF LOAN SHARKS?

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