RE: South Africa's Interest Rate Hikes Crushing Consumers
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Since governments and central banks don't produce anything, they cannot print money to create food and energy, that is something people with skills provide and they have a limit. there's only so much oil that can be pumped and refined and so much food that can be pulled out of the ground.
So since they are powerless to increase supply the only option is to reduce demand and that's what they are hoping to do with raising interest rates. The higher rates go, the fewer people have to spend, they need to pay debt. The higher rates go, the more businesses die, so it drives job loss, meaning people have less money to spend.
Dear @chekohler, Do you mean that governments and central banks are driving inflation by raising interest rates because there is a shortage of food and energy production relative to the global population?
No I mean they already drove inflation and now they are trying to curb it by driving down access to money and demand for credit
I translated that governments and central banks increase interest rates and lending interest rates to curb consumption by the common people.😄
Not just common people, but businesses too, they are trying to destroy jobs and anything that will help drive down demand for goods and services and increase hoarding of cash
Then we go back to the medieval feudal era.😯