Where are we heading? According to world bank statistics, more than 100 banking crises have occurred globally in last two decades, all were resolved by bailouts at taxpayers expense. This is essentially because of our (taxpayers) ignorance of financial markets, we (taxpayers) put so much faith in Pension Funds, Retirement Schemes, in investing in government bonds etc just thinking that life after 60 would be comfortable. In turn to provide you with that comfortability government trusts hedge fund managers, private equity players, venture capitalists to take a risk on the economy. But what taxpayers must realize is its a vicious trap, that they (taxpayers) are getting into a situation in which one person (hedge fund managers) makes the decision about how much risk to take, while someone else (taxpayer) bears the cost if things go badly. My god its vicious trap, Financial bailouts of lending institutions by governments, central banks or other institutions can (and do) encourage risky lending in the future if those that take the risks come to believe that they will not have to carry the full burden of potential losses. Lending institutions need to take risks by making loans, and usually the most risky loans have the potential for making the highest return. So-called too big to fail lending institutions can make risky loans that will pay handsomely if the investment turns out well but be bailed out by the taxpayer if the investment turns out badly. THATS WHY I SAY.. THE MOTHER OF ALL EVIL IS SPECULATION!
Posted on: Sun, 03 Aug 2014 17:47:23 +0000
Trending Topics
Recently Viewed Topics
© 2015