Is borrowing and lending money a big evil confidence trick?

[TimberWolf]

Example: a woman on Newsnight was wittering on about how her business wouldn’t be able to grow or survive seasonal variations in demand without credit, which is fair enough. But if her competitors, suppliers and customers hadn’t also been provided credit, the money she’d need to borrow to compete and pay for goods would be less.

Another example: Most people need to take out mortgages to buy houses. So house prices rise and the amount needed to borrow to buy a house goes up. If people didn’t borrow so much, the need to borrow would be less.

Example 3: The countries that borrowed the least, e.g. India, Middle-East and China, are about to overtake those that borrowed the most, e.g. you and me.

[cojak]

Example: a woman on Newsnight was wittering on about how her business wouldn’t be able to grow or survive seasonal variations in demand without credit, which is fair enough. But if her competitors, suppliers and customers hadn’t also been provided credit, the money she’d need to borrow to compete and pay for goods would be less.

Another example: Most people need to take out mortgages to buy houses. So house prices rise and the amount needed to borrow to buy a house goes up. If people didn’t borrow so much, the need to borrow would be less.

Example 3: The countries that borrowed the least, e.g. India, Middle-East and China, are about to overtake those that borrowed the most, e.g. you and me.

An interesting philosphical question because many of the financially 'stable' countries you've mentioned still consider Usury to be a sin.

It may be an idea to consider how Israel has fared in this current crisis as they may have got the balance right...

[threaded]

Since stopping borrowing to finance projects things have got an awful lot smoother. Having bank people sticking their oar in generally screws stuff up, creating extra work, which means you need to borrow++, as they really really don't 'get it' in a deep and meaningful way, (Or they do, and are deliberately muddying the water. Nah, they're just dim.)

I've seen many a good start-up completely shafted by banks, and am now firmly of the opinion that Usary is a sin. These ancient guys who dreamt up these religious rules were onto something fundamental.

[AlfredJPruffock]

Despite its ubiquity, sex may not be the essential moral issue of our age. On the other hand, the moral issue of credit and debt, the very foundation of our world financial system -- the issue of usury -- once a prominent issue within church circles, is debated not at all. We have chosen to join sexuality with money because we believe that within the Christian community a critique of power and mammon should take precedence over a personal morality.

To add insult to injury Tony Blair changed his faith to become a Catholic - a man of the upmost questionable morality greed and vainglorious.

His arching ambition to become a President of Europe - in one parallel world - led to the final conflict .

A sad era for the Catholic Church - with a former Hitler Youth Pope - and thats in this World - not a parallel one.

[AtW]

Example 3: The countries that borrowed the least, e.g. India, Middle-East and China, are about to overtake those that borrowed the most, e.g. you and me.

That's because they were selling stuff to Western countries who were getting deep into debt in order to buy those goods.

[VectraMan]

Example: a woman on Newsnight was wittering on about how her business wouldn’t be able to grow or survive seasonal variations in demand without credit, which is fair enough.

But perhaps a business that constantly relies on credit isn't actually viable, and so isn't a business at all? In that example, being more prudent with the money in the good seasons should be enough to ride out the bad seasons.

[milanbenes]

I'm with threaded here, spot on.

Milan.

[bobhope]

Yes.

Henry Ford once said :

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."

Hanging's too good for them.

[sasguru]

Closer to home I wonder how the many Indian and Chinese small businesses in London fund themselves? I'm willing to bet they live within their means and if they really need money rely on family networks etc. rather than banks.

[milanbenes]

borrow borrow borrow it's the only way


Milan.