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21 sats \ 7 replies \ @zuspotirko 11 May 2022 \ parent \ on: Daily discussion thread
I mean ... I would lend my kitchen blender to my neighbor. I would trust e.g. my son to receive lended bitcoin to attend university in a hyperbitcoinized utopia. I would also think that a business could lend against a house even in a hyperbitcoinized world.
I am just suspicious of money-supply increasing lending in fiat - not "lending" as a general concept.
Yeah, i tend to think that trust agreements are reasonable...
Asset Backed Loans, like lending against a house, don't appear to fabricate money out of thin air.
I'm intrigued by the mechanism some of the bootcamp-style software schools structure their loans... 'pay us 10% of your salary for a few years after you're done with the program'.
But interest backed loans seem usurious. Maybe Sharia Law has something right there.
I'm not an expert on these things, and i'm just going by my gut... but my sense is that things are fucked as a result of money games that are played. Many people here will agree with that final statement, but for different reasons.
It's probably a good conversation to continue.
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Asset Backed Loans, like lending against a house, don't appear to fabricate money out of thin air.
Incorrect. The balance sheet of a bank as a whole lends out more money than it gets in deposits (in Europe according to the Basel laws). You cannot say credit x increases money supply and credit y does not.
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Question:
isn't there a difference in asset backing, though, between 100% backed and not 100% backed?
the article i linked above references 100% reserve backed paper, and discusses it at length.
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Well, for the bank it makes a difference since a backed loan (eg most things real estate or other collateral) are generally less risky. While things without collateral (e.g. student loans) are more risky.
In the EU the Basel laws limit how much a bank can lend out depending on risk and foreign capitals (e.g. deposits) and own capital (what the bank legally owns itself). So having lots of secure mortgages or having few risky loans which would both be according to the law actually do make a difference in the amount of money supply increase wile just being a different risk/return ratio for the bank.
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Yeah, I think interest is fundamentally evil. If anything, interest should be pegged to inflation. If 1 apple cost 10 sats when I lent it to you, and you want to return the loan a year later but 1 apple now costs 12 sats, then you give me back 12 sats.
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I think interest is fundamentally evil.
That's why I wouldn't take interest when I lend my kitchen blender to my neighbor :p
If 1 apple cost 10 sats when I lent it to you, and you want to return the loan a year later but 1 apple now costs 12 sats, then you give me back 12 sats.
But what if a genious wants to start a business to make his genious idea a reality and someone would lend him money to pay the salary for the first year (at his own risk!!). And rich person b would take the risk... Would you say it's evil if the two get a consensual agreement?
I think there is a spectrum here somewhere
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Would you say it's evil if the two get a consensual agreement?
well... there's a difference between saying something is evil and regulating it out of existence. so, in this hypothetical, i could do both... say it's evil, and allow it.
still, i would prefer that systems are developed and maintained which enable the Genius to solicit wages from the Investor in exchange for equity, much as it's done now.
likewise, if the Genius went to a Bank and wanted to borrow enough to start his business, i would prefer to see Bank take an equity stake in the business instead of taking a rent on the money... but who am I to tell them what they can and can't do.
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