By Henry McRandall
Just a few days ago, the Bank of Canada jacked up its base interest rate by one quarter point and hinted at the possibility of more rate hikes to come in 2018 – depending, to some extent, on what ultimately happens with the NAFTA re-negotiations. And, of course, all the gangster banksters raised their prime lending rates by a similar amount.
The rationale for jacking up interest rates was to “prevent the economy from over-heating.”
That same clarion cry from the Bank of Canada and from the puppet political prostitutes of the Ownership Class – or Top1% – is heard whenever unemployment drops sufficiently that workers finally have a wee bit of power to press for higher wages.
It was of no concern either to the Bank of Canada or to its U.S. equivalent, The Fed, when the Top1% – whose wealth is generally held almost entirely in the form of company shares and other investment instruments – soared by almost 35% in the first 13 months after Donald Trump’s election as president of the U.S.
But as soon as average working-class wages began to creep slightly past the inflation rate, the Establishment’s puppets moved in to jack up interest rates and ensure that any increase in average wages not come at the expense of the Top1%. And that increase in mortgage and consumer credit interest rates guarantees that, ultimately, the average worker’s disposable income WILL NOT rise above the rate of inflation.
The direct consequence will be that even with a rising economic tide, not all boats will be lifted. Many working-class and middle-class households will be plunged into foreclosure and/or bankruptcy by the crushing burden of interest on record levels of consumer debt and on outstanding mortgages of homes whose value will likely plunge as the bubble in asset values inevitably plunger.
The only possible way of preventing a massive further erosion of collective financial stability – worldwide – would be through a global debt jubilee or cancellation. Check out the history of debt jubilees, its massive socioeconomic benefits – and how such a debt jubilee could be carried out today – as explained by Michael Hudson and Charles Goodhart on Counterpunch.org: https://www.counterpunch.org/2018/01/19/could-should-jubilee-debt-cancellations-be-reintroduced-today/
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