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They use discounted cash flows to model them, which are dependent on loans as a key component. VCs also use loans themselves from time to time, and their inves

They use discounted cash flows to model them, which are dependent on loans as a key component. VCs also use loans themselves from time to time, and their investors can use loans to invest in them.

jongjong 4y ago
Loans by modern banks rely on the issuance of new currency; it's a scheme which relies on diluting the value of citizens' existing currency. It's unethical; it's stealing from the many to enrich the few who will receive the credit once it's spent into the economy (going into friends' businesses). Kind of like how Carl Icahn sat on the Hertz board, made Hertz take out a huge loan, used the credit to award a huge contract to one of his other businesses and then let Hertz go bankrupt. Citizens footed some of the bill by having their savings and salaries diluted (since Carl kept the proceeds of the loan and spent it into the economy; contributing towards inflation) and of course Hertz shareholders footed most of the bill. It's just theft.
- sanderjd 4y ago
  This is so misguided. Just raising interest rates by a few points has resulted in many thousands of people losing their livelihoods in under a year, because companies could no longer justify taking out loans. What you're suggesting is eliminating loans altogether. This is a fun dorm room thought experiment, but it's not even hyperbolic to say that if it were actually pursued, it would result in a huge number of deaths by starvation.
  - brutusborn 4y ago
    Modern Islamic countries without usury manage to feed their citizens so although I would agree that banning loans would cause a lot of pain in the modern economy, I can't see how it would cause mass starvation.
    - jongjong 4y ago
      Exactly, and even in those cases, it only serves to enrich certain people who intermediate the loans and to satiate reckless or impatient consumers. It's more like gambling; it appeals to and takes advantage of human nature but doesn't benefit the individual; it only benefits the house. It doesn't actually provide any true value to society.
      - sanderjd 4y ago
        This is nonsense. We're rich. Broadly.
      - brutusborn 4y ago
        I disagree, loans can benefit both parties if they are well regulated. In these cases loans provide a lot of value for society. Reckless loans are a symptom of an under regulated system (or in the case of the GFC, a combination of under regulation and no effective enforcement).
    - sanderjd 4y ago
      Your "countries with Sharia law are good" argument might not be as compelling to me as you seem to think it is... Are there any good examples of non-authoritarian non-dictatorships in this space? Edit to add: You're right, I guess, that our government would probably take over everything and narrowly dodge mass starvation with mere mass poverty, but that doesn't sound great to me either. And mass starvation isn't so far fetched either, there have been multiple such occurrences globally within the last century.
      - brutusborn 4y ago
        I didn't say they were "good", I'm just pointing out that they generally aren't starving, which means your point was hyperbolic. I don't understand why the government would need to "take over everything" to avoid starvation. There's no technical reason that capitalism can't exist without usury. Again I'm not saying usury is good or bad, just that it doesn't 'need' to exist. I suspect it is good for society when well regulated (better use of capital), and horrible for society when allowed without limit (indentured servitude, instability e.g. GFC caused by immoral lending). The question is which world are we living in? I'd argue the West is living in the latter world, the GFC is a symptom that shows that our financial system is causing more harm than good. In this case if the US had used the Islamic system, banks would have owned the assets they were "lending" for, and so would not be incentivized to make risky loans and sell them to unsuspecting investors. A bank isn't going to give a loan on an overvalued property if they know it will sit on their books until the losses are eventually realized.

They use discounted cash flows to model them, which are dependent on loans as a key component. VCs also use loans themselves from time to time, and their investors can use loans to invest in them.

jongjong 4y ago

Loans by modern banks rely on the issuance of new currency; it's a scheme which relies on diluting the value of citizens' existing currency. It's unethical; it's stealing from the many to enrich the few who will receive the credit once it's spent into the economy (going into friends' businesses). Kind of like how Carl Icahn sat on the Hertz board, made Hertz take out a huge loan, used the credit to award a huge contract to one of his other businesses and then let Hertz go bankrupt. Citizens footed some of the bill by having their savings and salaries diluted (since Carl kept the proceeds of the loan and spent it into the economy; contributing towards inflation) and of course Hertz shareholders footed most of the bill. It's just theft.

sanderjd 4y ago
This is so misguided. Just raising interest rates by a few points has resulted in many thousands of people losing their livelihoods in under a year, because companies could no longer justify taking out loans. What you're suggesting is eliminating loans altogether. This is a fun dorm room thought experiment, but it's not even hyperbolic to say that if it were actually pursued, it would result in a huge number of deaths by starvation.
- brutusborn 4y ago
  Modern Islamic countries without usury manage to feed their citizens so although I would agree that banning loans would cause a lot of pain in the modern economy, I can't see how it would cause mass starvation.
  - jongjong 4y ago
    Exactly, and even in those cases, it only serves to enrich certain people who intermediate the loans and to satiate reckless or impatient consumers. It's more like gambling; it appeals to and takes advantage of human nature but doesn't benefit the individual; it only benefits the house. It doesn't actually provide any true value to society.
    - sanderjd 4y ago
      This is nonsense. We're rich. Broadly.
    - brutusborn 4y ago
      I disagree, loans can benefit both parties if they are well regulated. In these cases loans provide a lot of value for society. Reckless loans are a symptom of an under regulated system (or in the case of the GFC, a combination of under regulation and no effective enforcement).
  - sanderjd 4y ago
    Your "countries with Sharia law are good" argument might not be as compelling to me as you seem to think it is... Are there any good examples of non-authoritarian non-dictatorships in this space? Edit to add: You're right, I guess, that our government would probably take over everything and narrowly dodge mass starvation with mere mass poverty, but that doesn't sound great to me either. And mass starvation isn't so far fetched either, there have been multiple such occurrences globally within the last century.
    - brutusborn 4y ago
      I didn't say they were "good", I'm just pointing out that they generally aren't starving, which means your point was hyperbolic. I don't understand why the government would need to "take over everything" to avoid starvation. There's no technical reason that capitalism can't exist without usury. Again I'm not saying usury is good or bad, just that it doesn't 'need' to exist. I suspect it is good for society when well regulated (better use of capital), and horrible for society when allowed without limit (indentured servitude, instability e.g. GFC caused by immoral lending). The question is which world are we living in? I'd argue the West is living in the latter world, the GFC is a symptom that shows that our financial system is causing more harm than good. In this case if the US had used the Islamic system, banks would have owned the assets they were "lending" for, and so would not be incentivized to make risky loans and sell them to unsuspecting investors. A bank isn't going to give a loan on an overvalued property if they know it will sit on their books until the losses are eventually realized.