Well, we know why. They can’t spin this news to be good leftarded news. Still, they could have given us the rate figures, at least.
Here’s a head line for an article from AP ……
And, here’s the article, in full ……
BEIJING (AP) — China cuts interest rates for the 3rd time in 6 months to shore up anemic economic growth.
Like the US, the cuts in the rates is probably because people and businesses in China, like America, don’t borrow enough money …… or something.
Well, I’ve said this before, and I guess I’ll state it, again.
When interest rates are already very low, lowering them some more is only a futile and desperate gesture. It does nothing to address the underlying weaknesses.
The fact is, in many ways this is paradoxical. China wants to encourage economic growth by lowering interest rates, but, what it does is encourage businesses to borrow money, most of which should not be borrowing. They are the weakly established businesses, else they could already afford to borrow at the already low rates, or not have to borrow, at all. In other words, they’re encouraging future failure.
But, worse than that, it discourages saving. When you get paid no interest to save money, why keep it? It only loses value as you keep it. A person or business needs to save money for times of need and lean times. It’s the buffer one needs. But, now, China, like the US and the EU, is stripping that buffer away.
Interest rates should be set fairly low, and they should stay that way. Interests rates should only change modestly, and rarely. This gives businesses and people the stability they require to plan for the future. When they constantly change, you can’t plan … this goes for both borrowing and saving. 3 times in 6 months? That’s idiocy and demonstrates flailing.
Interest rates should only be set in response to demand for money. They are not to be used as an impetus for demand.