From graph below:
“BOT Monthly Report of June 2019”.
“If the internal government debt from graph above is literally fueled by Commercial Banks then … “
… where does money from Commercial Banks comes from?
It can’t be outside the country, only Tanzanian banks can operate on TSH and they have been mandated to do so by BOT. So …
… the Common answer: Customer Deposits
… the Expert answer: Just Nowhere
In fact, it can not be deposits because even deposits must come from somewhere before deposited, in this case it simply implies nowhere. So is it okay to assume, this guys can literally print money out of nowhere just like papers?
But that must be Illegal! However, that’s what report suggests for last 10 Years.
Ok! So, What the big deal let assume they miraculously print this papers. Maybe …. can’t they just lend us?, that sound pretty cool!! Nop! That will cause inflation rate which will ruin our economy in minutes.
On top of that, here is another to catch, why do they put Interest? , because they really don’t need it, to be honest.
Unless it’s the conspiracy game, a complimentary of ponzi scheme, and surely it is! In summary you owe them something you can never create, an (Interest) even government can’t, the above graph vivid verify the case. From individual level you can grab money from somewhere and pay them back BUT from community level or the big picture that interest is available nowhere even within the banks. It’s only a trick way of owning share of economy and the more people trust and borrow from Banks the more Banks own larger shares of community economy.
Can the government suffer similar effect? Nop! they have Central Bank and they can issue bonds, print some money and service their domestic loans then manage inflation later. Individuals surely they can’t.
Therefore, at the end it’s inevitable for them, Bank, to own the Large Shares of Economy.
So are we doomed with this Banks? Nop! but we are surely doomed, if we ignore banks in our financial models. One of the cool things about Banks, is their ability to literally print this money in terms of loan issuing 💵 for you too, only if you will take time to work with them and win their trust, …
How long will it take?
Reports indicate not less than 5 or 6 Years (kibongo bongo that is a century) of Building your portfolio with banks necessary for serious investment. But you may be lucky and spent less time. Who knows, however its absolute worth trying.