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Planets may exist in the absence of credit, but there is no such thing as an economy that exists without credit.
The problem is that credit is an abstract construct, just like the future.
The future comes whether we want it or not. Unfortunately the fact that someone will pay his debt is not as certain as the future.
Originally Posted by saganista The problem is that credit is an abstract construct, just like the future.
How is that a problem? Money itself is an abstract concept. Sometimes we represent it with salt or beads. Sometimes we become fascinated by shiny metal objects or turn to little pieces of paper. These are all pronouns with an abstract antecedent.
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Originally Posted by Tricky D
The future comes whether we want it or not.
Our cemeteries are full of people for whom the future stopped coming, whether they wanted it to or not.
Quote:
Originally Posted by Tricky D
Unfortunately the fact that someone will pay his debt is not as certain as the future.
Your buddy may skip town. A customer may go into bankruptcy. The company whose bonds you hold may collapse. Uncertainty is one of the things that comes with the future, assuming that the future comes at all. On the other hand, when was the last time the guy at 7-11 refused to accept your ten-dollar bill? When was the last time the US Government defaulted on any of its debt securities? How many ways are there in which to calculate the uncertainty of receiving a settlement of debts owed to you and factor that into your business model? Bottom line is I still don't see the nature of the probelm you are trying to point out...
True, but if you cannot exchange money into something valuable (like gold) it is just paper.
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Our cemeteries are full of people for whom the future stopped coming, whether they wanted it to or not.
No they're dead which is not the same as not aging anymore.
Corpses still age.
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On the other hand, when was the last time the guy at 7-11 refused to accept your ten-dollar bill?
Funny, just yesterday I went to my grandfather by bus which costs 3 euros.
The busdriver initially did not want to except my 3 Euros which I only had in small change (3 fifty eurocents coins, ten 1 eurocent coins and the rest in 5 eurocent coins). I pointed out that I paid in cash and that it was not my problem that he had no room for my coins.
True, but if you cannot exchange money into something valuable (like gold) it is just paper.
If you can't exchange money for things of value, then it isn't money. Gold, meanwhile, is about as valuable as wampum. Not much intrinsic use for either one, actually. All you can do is hope that some other people want the stuff enough so that you can dump it off on them for something of real value...money. Little pieces of paper...or increasingly, little electronic bits that describe how many little pieces of paper you would have if you had any at all. Much more useful than gold...
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Originally Posted by Tricky D
No they're dead which is not the same as not aging anymore.
Corpses still age.
But they are rarely caught unprepared to deal with the implications of their aging.
Quote:
Originally Posted by Tricky D
Funny, just yesterday I went to my grandfather by bus which costs 3 euros.
The busdriver initially did not want to except my 3 Euros which I only had in small change (3 fifty eurocents coins, ten 1 eurocent coins and the rest in 5 eurocent coins). I pointed out that I paid in cash and that it was not my problem that he had no room for my coins.
Some people. You'd think he'd have appreciated your having exact change...
Originally Posted by Mircea I see that people generally still believe that 'the system' equals the world.
The end of the dinosaurs only meant the end of the dinosaurs and not the end of the world, so a breakdown of the current economical system might spell the end of the majority of the people but it is not the end of the world.
The developed nations cannot survive without credit.
That does include your rinky dinky country where I used to drive to Eindhoven to eat at the Kentucky Fried Chicken there.
Unlike you and the Americans, I'll do just fine living in Romania, where we don't need credit.
Why extend credit when there is a likelihood the customer will default? Cash only.
The overwhelming majority of customers do not default, and there are statistical models that show tendencies and trends, which is actually built into the system (ie you subsidize it).
Money is nothing more than a storehouse of value, we're still basically on a barter system, but money standardized the value of things. Made it easier to trade one cow for three bushels of wheat, or whatever else was considered "fair" at the time.
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The problem is that credit is an abstract construct, just like the future.
Unfortunately the fact that someone will pay his debt is not as certain as the future.
No they're dead which is not the same as not aging anymore.
I pointed out that I paid in cash and that it was not my problem that he had no room for my coins.
