Page 92 - #letter to son

#SangamNiti NIGHTFALL
it overriding the authority of financial institutions?

So the point is that if in the federal setup the government considers
all citizens to be equal, why cannot it waive-off industry loans, small-
sector unit loans, business loans, student loans, etc.? Why restrict just
to agricultural loans? Today, some core sector industries are tottering
under a mighty debt burden. So why can’t they be provided relief too and
given an opportunity to start afresh? These industries provide hundreds
of thousands of jobs to those at the bottom of the pyramid, and to avert
job losses, the government should provide bailout packages.

So what I’m trying to convey is very simple. Why not use this as a prime
opportunity to pave the way for becoming a debt-free country and a
debt-free world? Why this is an opportune moment is also because the
globe is flooded with debt that some estimates peg to be almost 3 times
the global economy. Out of this, a staggering 66 per cent is the interest
component. But in the origin of money, where does the concept of
interest fit in?

When we think of wealth and affluence, we often think of the massive
personal fortunes of business magnates in the realm of the technology,
insurance and manufacturing spaces. However, it is only since the
Industrial Revolution that measuring wealth by one’s bank balance has
been a norm for the world’s richest. Interestingly, for most of recorded
human history, the lines around wealth were quite blurred. Leaders like
Augustus Caesar or Emperor Shenzong had absolute control over their
empires, while bankers like Jakob Fogger and Cosimo de Medici were
often found pulling the strings from behind. The last point is important
as it elucidates the importance of the banker and the banking system in
helping the influential amass wealth and power.

Principally, currency is the domain of the central banking system. Central
banks, for instance the Reserve Bank of India or the Federal Reserve Bank
of the US, create money either by printing it or by buying bonds in the
treasury market. When central banks buy bonds, they usually buy their
own country’s treasury bonds and their purchases are made from banks
that own these bonds. The money from the central banks goes to the bank

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