Rebirth 79: I opened a bank in the United States

When the federal interest rate rises, the loan interest rates of various banks will also rise, and according to Carter's speculation, after the rise, it should not be lower than 32%. In this way, borrowers need to pinch their fingers before they want to borrow money.

Calculate, the annual interest rate for one year is more than 30%, this special cat will have to pay twice the amount to the bank in less than three years.

Is this scary? Of course it’s scary! So the borrower doesn’t dare to lend, but does he still need a loan? Of course he does! If he doesn’t need a loan, he won’t go to the bank to inquire about a loan, right?

If your own Black Bank comes into being at this time, tell him to come to me for a loan! Although my interest rate is not low, you can pay it back slowly. If you borrow a thousand US dollars and repay it for a year, you will only get a loan every month.

You only need to repay about one hundred US dollars, which is much less. If you pay it back in two years, congratulations, you will only need to pay back 67 US dollars every month! If you pay it in three years...

In short, the longer you borrow, the less you need to repay every month. But by repaying the money like this, you, as a lender, will actually earn more!

Because compared with repaying the principal and interest in one lump sum, when you repay it monthly, you will have funds flowing back every month, and then you can take this money and then lend. The so-called leverage appears!

With a capital of one million, it is normal to issue loans of two to three million in this cycle for a period of time!

"Hey! Are you listening? You're not still thinking about the unsecured loan, are you?"

The more Carter thought about it, the more beautiful it became, and the more he thought about it, the more he became lost in thought. This wandering look made Goodman glare so angry that he raised his palm as big as a cattail leaf and waved it in front of Carter's eyes.

"Ah, no. The matter of unsecured loans has been put on hold for now. I'll think about it later. But I just thought of another idea. What is our current bad loan rate?"

"Usually it's only about 2%. It wasn't until the economic downturn in the past few years that it slowly increased. Now it's about 8%."

Goodman looked at Carter suspiciously, fearing that Carter might have some new ideas...

"I know, I have a new idea..."

Damn it! What are you afraid of?

Goodman's eyes widened, his body trembled with anger, and he raised his hand to...

"As for repayment, we can try installment repayment in the future. We no longer require the principal and interest to be repaid at once after maturity. The principal and interest will be added together and then spread over each month, so that they can repay the money month by month. This will reduce the pressure on customers.

At the same time, it will be easier for us to withdraw our funds. We should be able to reduce some bad debt rates. Even if it cannot be reduced, it will not be like now, where once a debt goes bad, it will be so bad that we will lose everything."

Carter lowered his head to light his cigarette and said calmly. After speaking, he raised his head and saw Goodman's arm stretched forward, hanging in the air. He couldn't help but ask curiously:

"Goodman? What are you doing?"

"Ah? I... I... fish my head, yes, I'm going to fish my head. I forgot to wash my hair yesterday and my scalp is a little numb! Hahaha~"

The forward-stretched arms wrapped around his head very naturally. At this moment, Goodman's scalp really felt a little numb. As a banker, he has the financial sensitivity that he should have.

Almost as soon as he heard Carter's story, Goodman realized the value contained in this change in repayment method, but at the same time, he also thought of the problems involved.

"Hey Carter, I don't know if you are clear, but installment loans have actually appeared a long time ago. In the "Harrison Act" of 1800, public land was sold to farmers through installment loans. People who purchased the land only needed

You need to make a down payment of 25% first, and the remaining 75% can be repaid in three installments within four years.”

Goodman pulled out his hair, sighed, and then said:

"In addition to the Harrison Act, installment loans were also very popular in the United States more than fifty years ago. Especially in automobile-related industries. In 1900, there were no cars in the United States, but by 1929, more than 90% of American households

They all have cars. Do you think people really had that much money to buy so many cars at that time?"

Ahhh? Ahhhh??

At this moment, Carter felt a bit like Fan Xian showing off glass and cement in front of his father in "Celebrating More Than Years". Regardless of whether it was awkward or not, Carter was roaring in his heart: Since you have paid installments so early, why did Mao

Are loans now paid in one lump sum?

"The invention of installment loans stimulated economic growth, but there was a fatal problem. It was excessive consumption, and the money from installment loans was actually overdrafting the future. But people at the time were crazy and they didn't realize it.

At this point, I'll lend you a thousand dollars, and I only have to pay back one hundred dollars every month. I still have nine hundred dollars left, and my life can still go on. Then I saw another product that I liked, so I started again.

After borrowing a thousand dollars, I still have eight hundred dollars a month, so my life is a bit difficult, and then I...do you understand?"

"This is the situation for customers, as well as for businesses. Suppose I have a car factory now. Originally, I thought that there are not many rich people in my place, and it would be good if I could sell thirty cars a month.

So I just bought a production line and hired ten workers. But now suddenly 300 people are waving banknotes and want to buy cars. Do you think I can sell them?"

Then it will definitely sell! For merchants, if someone buys it, why don’t you sell it? Is it because the money is so hot?

At this point, Carter already understood.

It is nothing more than the existence of installment loans that artificially increases people's consumption power. Then it is market demand that determines market supply. If people want more goods, factories will have no choice but to increase production.

They bought more production lines, hired more workers, and offered higher salaries to recruit people. Even in the process of expanding production, the factory was taking out loans. As a result, one day, people suddenly realized that they already had a lot of loans.

, after the salary in the next few years excludes basic living expenses such as food and drink, I will have nothing left after paying off the loan.

As a result, people did not dare to take out loans. No loans meant no consumption. What should the factories do at this time? The things produced could not be sold, so many production lines were almost abandoned, and there were still a large number of personnel wages to be paid.

As a result, the factory began to lay off workers, and this layoff was like a fuse that ignited the fuse leading to the explosive.

In that kind of environment, would factory workers not take loans? Now their jobs are gone, but their loans are still there!

When everything goes wrong in life, how can they still have money to repay the loan? The first step is that they have no money to repay the loan, and the next step is that the bank is dumbfounded. Because the bad debt rate has begun to rise, and the loaned money cannot be recovered, what can you do to save costs?

manage?

Cut! Keep cutting! Cut to death!

In this chain of events, more and more people are unemployed, and the more unemployment there is, the less consumer demand there is, and the more stores will close, ultimately forming a vicious cycle.

Then in October 1929, the first shot of a complete collapse was fired from the New York stock market! Banks went bankrupt, companies closed down, a large number of people lost their jobs, and their non-employed income was cut in half. Living standards dropped sharply, and public order was almost gone.

collapse...

With such a lesson learned from the past, who else would dare to engage in that kind of installment payment? Are they not afraid of what happened in 1929 and do it again?