5 ms·

I love the fact about them being coops and having the ability to borrow with their cheese as collateral. It is so old world and so wholesome. I'd like to borrow

by hkt 4y ago

I love the fact about them being coops and having the ability to borrow with their cheese as collateral. It is so old world and so wholesome. I'd like to borrow against my cheese one day.

0des 4y ago
What type of cheese do you make?
- EnergyCrush 4y ago
  This made me laugh so hard, not an ounce of bad intent to the previous post.
zeristor 4y ago
“Blessed are the cheese makers”
- brianzelip 4y ago
  "Not meant to be taken literally, it refers to any manufacturers of dairy products."
nemo44x 4y ago
You can borrow against most assets you own. Margin in your stock account, a mortgage or HELOC, etc. Credit cards are essentially based on your ability to repay much like borrowing against your future cheese revenue.
- wahern 4y ago
  Modern finance and accounting more-or-less started in Renaissance Italy. Double-entry bookkeeping meant merchants and bankers kept good books. Good books and good accounting made negotiable instruments like bills of exchange (e.g. checks) and letters of credit reliable--at least when drawn on or issued by Italian banks and their partners around the continent--which meant travelers and traders didn't need to carry alot of currency or gold (dangerous), or resort to barter. Negotiable instruments in turn built up foreign exchange markets. Foreign exchange markets grew foreign financing. Larger, more liquid financing markets meant it became easier to borrow against assets (i.e. security). And on and on. Much of modern transactional banking and securities law became settled during that period, eventually becoming nearly universal across disparate legal regimes around the world.
  - PyWoody 4y ago
    Sounds interesting. I never would have assumed double-entry bookkeeping went back that far. Any good book suggestions?
    - el-salvador 4y ago
      A 1914 English translation of his 1499 Italian books from archive.org: https://archive.org/details/ancientdoubleent00geij https://archive.org/details/ancientdoubleent00geij
    - briandear 4y ago
      The Medici family supposedly invented it. Very fascinating family. https://bigthink.com/culture-religion/how-the-medici-family-created-and-lost-their-banking-empire/ https://bigthink.com/culture-religion/how-the-medici-family-...
    - puszczyk 4y ago
      I enjoyed reading The Verge by P. Wyman https://www.amazon.com/Verge-Reformation-Renaissance-Forty-Years-ebook/dp/B08P1MF813 https://www.amazon.com/Verge-Reformation-Renaissance-Forty-Y... It describes changes that happened in war, mining, shipping, trade in (mostly western) Europe in the last decades of XV century. The common theme is finance and it includes a chapter on how bank houses became bigger and could secure much bigger loans (which allowed bigger states to wage wars, or rich individuals to bid for top titles ;)). Fun read.
      - firstcommentyo 4y ago
        Welcome to MMXXII. About X centuries ago "we" imported the Hindu-Arabic numerals. I know, Latin numbers carry the myth of being more "safe" but really you should try the arabian numerals. They revolutionized math and eased reading text alongside. thumbs-up
        rossvor 4y ago
        It's a convention to use roman numerals for centuries in some european countries. Parent poster probably just done it out of habit.
- randbox 4y ago
  Those are all different things and different forms of borrowing though. When someone borrows against cheese they are borrowing against existing personal property for which labor has already been supplied rather than borrowing against future earnings. The lender does not need to verify income and credit, just inspect the purity of the cheese. With a home loan, the owner is borrowing against the personal property in the building, as well as the common property in the land and the future earnings of other people such as their tenants. Additionally in the case of a co-op, the interest charges the organization collects on the debt are usually reinvested locally for the benefit members.
- SilasX 4y ago
  You can borrow against most assets whose values are easy to assess and are readily resellable, and which will keep that value, yes. What’s significant here is cheese being in that category. It’s still (like a home or publicly traded stock) the extreme exception, not the rule. I certainly can’t borrow against the cheese in my refrigerator (“fridge”), so it’s weird that you’d trivialize the case of co-op cheese as part of a totally normal trend of being able to borrow against anything. Most of the stuff in my living room, for example, would not be able to secure a loan, except maybe a pawn loan on undesirable terms. And it’s really weird to look at credit cards as an example of the same thing. “Your ability to earn and repay” is not generally classified as an “asset” except maybe metaphorically — not a financial/accounting sense.
randbox 4y ago
zdragnar 4y ago
It's common for plant farmers in smaller countries too. I interviewed at a company that wanted to help banks lend to tiny farmers who have to borrow against future harvests to afford fertilizer / seed / equipment maintenance for the season ahead. Since many of these small farmers are geographically and technologically a long way off from where the banks are at, they don't get great rates because the banks (currently) don't have great tools for assessing the risk of any particular family farm.
- brnaftr361 4y ago
  This is how debt peons are made, historically. Kinda sad to see the same patterns in the modern world.
  - danuker 4y ago
    Getting a bad rate doesn't mean you also accept it.
    - pempem 4y ago
      Having only cheese to create leverage limits your options
      - brnaftr361 4y ago
        Sounded to me like they didn't even have the milk, and like they're in rural areas of developing nations.
      - deleted 4y ago
        [deleted]
  - Panzer04 4y ago
    Isn’t this the classic use case for debt? Upfront funding to fund an investment?
    - 4y ago

by hkt 4y ago

I love the fact about them being coops and having the ability to borrow with their cheese as collateral. It is so old world and so wholesome. I'd like to borrow against my cheese one day.

0des 4y ago

What type of cheese do you make?

EnergyCrush 4y ago
This made me laugh so hard, not an ounce of bad intent to the previous post.

zeristor 4y ago

“Blessed are the cheese makers”

brianzelip 4y ago
"Not meant to be taken literally, it refers to any manufacturers of dairy products."

nemo44x 4y ago

You can borrow against most assets you own. Margin in your stock account, a mortgage or HELOC, etc. Credit cards are essentially based on your ability to repay much like borrowing against your future cheese revenue.

wahern 4y ago
Modern finance and accounting more-or-less started in Renaissance Italy. Double-entry bookkeeping meant merchants and bankers kept good books. Good books and good accounting made negotiable instruments like bills of exchange (e.g. checks) and letters of credit reliable--at least when drawn on or issued by Italian banks and their partners around the continent--which meant travelers and traders didn't need to carry alot of currency or gold (dangerous), or resort to barter. Negotiable instruments in turn built up foreign exchange markets. Foreign exchange markets grew foreign financing. Larger, more liquid financing markets meant it became easier to borrow against assets (i.e. security). And on and on. Much of modern transactional banking and securities law became settled during that period, eventually becoming nearly universal across disparate legal regimes around the world.
- PyWoody 4y ago
  Sounds interesting. I never would have assumed double-entry bookkeeping went back that far. Any good book suggestions?
  - el-salvador 4y ago
    A 1914 English translation of his 1499 Italian books from archive.org: https://archive.org/details/ancientdoubleent00geij https://archive.org/details/ancientdoubleent00geij
  - briandear 4y ago
    The Medici family supposedly invented it. Very fascinating family. https://bigthink.com/culture-religion/how-the-medici-family-created-and-lost-their-banking-empire/ https://bigthink.com/culture-religion/how-the-medici-family-...
  - puszczyk 4y ago
    I enjoyed reading The Verge by P. Wyman https://www.amazon.com/Verge-Reformation-Renaissance-Forty-Years-ebook/dp/B08P1MF813 https://www.amazon.com/Verge-Reformation-Renaissance-Forty-Y... It describes changes that happened in war, mining, shipping, trade in (mostly western) Europe in the last decades of XV century. The common theme is finance and it includes a chapter on how bank houses became bigger and could secure much bigger loans (which allowed bigger states to wage wars, or rich individuals to bid for top titles ;)). Fun read.
    - firstcommentyo 4y ago
      Welcome to MMXXII. About X centuries ago "we" imported the Hindu-Arabic numerals. I know, Latin numbers carry the myth of being more "safe" but really you should try the arabian numerals. They revolutionized math and eased reading text alongside. thumbs-up
      - rossvor 4y ago
        It's a convention to use roman numerals for centuries in some european countries. Parent poster probably just done it out of habit.
randbox 4y ago
Those are all different things and different forms of borrowing though. When someone borrows against cheese they are borrowing against existing personal property for which labor has already been supplied rather than borrowing against future earnings. The lender does not need to verify income and credit, just inspect the purity of the cheese. With a home loan, the owner is borrowing against the personal property in the building, as well as the common property in the land and the future earnings of other people such as their tenants. Additionally in the case of a co-op, the interest charges the organization collects on the debt are usually reinvested locally for the benefit members.
SilasX 4y ago
You can borrow against most assets whose values are easy to assess and are readily resellable, and which will keep that value, yes. What’s significant here is cheese being in that category. It’s still (like a home or publicly traded stock) the extreme exception, not the rule. I certainly can’t borrow against the cheese in my refrigerator (“fridge”), so it’s weird that you’d trivialize the case of co-op cheese as part of a totally normal trend of being able to borrow against anything. Most of the stuff in my living room, for example, would not be able to secure a loan, except maybe a pawn loan on undesirable terms. And it’s really weird to look at credit cards as an example of the same thing. “Your ability to earn and repay” is not generally classified as an “asset” except maybe metaphorically — not a financial/accounting sense.

randbox 4y ago

zdragnar 4y ago

It's common for plant farmers in smaller countries too. I interviewed at a company that wanted to help banks lend to tiny farmers who have to borrow against future harvests to afford fertilizer / seed / equipment maintenance for the season ahead. Since many of these small farmers are geographically and technologically a long way off from where the banks are at, they don't get great rates because the banks (currently) don't have great tools for assessing the risk of any particular family farm.

brnaftr361 4y ago
This is how debt peons are made, historically. Kinda sad to see the same patterns in the modern world.
- danuker 4y ago
  Getting a bad rate doesn't mean you also accept it.
  - pempem 4y ago
    Having only cheese to create leverage limits your options
    - brnaftr361 4y ago
      Sounded to me like they didn't even have the milk, and like they're in rural areas of developing nations.
    - deleted 4y ago
      [deleted]
- Panzer04 4y ago
  Isn’t this the classic use case for debt? Upfront funding to fund an investment?
  - 4y ago