MEXICO WITHOUT LIES

CHAPTER 7 Why do Mexicans pay such high interest rates?

Why do Mexicans pay such high interest rates? Can Mexican politicians become part of the solution instead of the source of the problems?

   In this chapter will see the second most important cause of insecurity, unemployment, and migration in Mexico.

Before that, let's review the situation.

The main characters in the drama of the failed Mexican development project are politicians, foreign investors and banks, and their culpability is only circumstantial.

Politicians try to be useful, the fact that they do not have the attitude, ability or honesty to fulfill their duties, is not their fault, but the various events that follow one another after the discovery of America.

Foreign investors are not to blame for being on the winner's side, their task was to negotiate, and if they made easy deals it's not their fault.

The banks are now mostly own by international consortiums, and are taking advantage of the situation as it existed before of them. Mexican banks now extinct were also insensitive.

CAUSE NUM. 2

ABUSIVE CREDIT POLICIES OF BANKS AND LARGE STORES

Originally, banks around the world had the sole objective of increasing their clients' money by financing successful businesses.

It was not until the second half of the nineteenth century that banks focused on the market of people with cash flow problems and began lending money for non-productive purposes, such as vacations, clothing, scholarships, etcetera.

Then in mid twentieth century, banks invented the "credit cards" and began the era of anguish for debtors and glory for banks.

As of that moment, the loans for the purchase of food, appliances, and all kinds of non-productive goods, have increased in number and in money. Consequently, banks, instead of having the priority of contributing to economic growth, are now in the business of promoting the increase in the cost of living.

In Mexico, banks and stores can charge total annual costs of more than 100% of the original loan. Also, as in most underdeveloped countries, in México there are no regulations to prevent financial institutions from making their clients believe they can improve their lives by buying consumables with borrowed money.

Most Mexicans pay their debts until the liquidation or until the collapse of their finances, if this second possibility occurs, it is common that by then the bank has already recovered the loan and obtained reasonable profits. The banks or stores will follow their nature and will not agree with the "reasonable", they will do everything possible to get more benefits.

Now let's review how this relates to insecurity, unemployment, and emigration.

Being persecuted by debt collectors is disturbing, but when the reason for nonpayment is the loss of your job, the problem becomes a major problem.

The day after your failed payment, your creditor places you in the list of "dishonorable debtors", such status decreases your chances of getting a new job.

When your expertise gives you a managerial level, no one hires you, because banks and insurance companies will deny any possibility of doing business with you. Potential employers will not take the risk.

So, the one who was once a respectable citizen is forced to do things he never intended to do, such as migrating to other country, or accepting a job without questioning whether it is legal or not.

WAY IN WHICH THE MEXICAN POLITICIANS ADDRESS THIS PROBLEM.

Politicians do not see the relationship between the cost of money and the empowerment of criminal organizations. They feel they have to show commitment to the well-being of their constituents, so that when they discover that stress has become the most important cause of absenteeism, they decide to discuss on the advisability of the Social Security System providing psychological help.