Over the years, this repayment of“independence debt” to their former slave owners, along with foreign-led coups and occupations, left the Haitian economy crippled and impoverished.
In contrast, if the FOMC uses price level targeting, the borrower's repayments in 2042 are likely to be close, in real terms, to what the borrower expected when originally taking on the loan.
These debt repayments not only hamper economic development but also facilitate a significant transfer of financial resources from poor countries to wealthy creditors in the North.
But if the FOMC uses inflation targeting, the borrower's repayments are likely to remain surprisingly expensive in real terms even in 2042, 30 years after taking out the mortgage.
The problem is that we must use the appropriation of earned surplus to finance all of the funds to repay a loan taken out to acquire an asset that is not a depreciation asset.
As of 2018, the Company is the only MFI applying cash-less microfinance where the repayment is completed with fingerprint authentication by the clients.
If this happens, then the interest rate would go up to at least about 4-5%, repaying back of the debt would be even more difficult, government debt would go skyrocket high, inflation will follow; the life of people will be more and more painful.
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