Quote:
Originally Posted by pornguy
Very True. But that is the EXACT reason we have all these issues.. Things used to be that if a company wanted to get a new printing press, they either had the money or they did not. I think the only way to fix some of these issues is simply to use secured loans or they just have to get along.
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That's not true. Banking and bonds have been around since before the dawn of the industrial age.
A loan being secured by property doesn't change the bank's reserve requirements, which was at the heart of the credit crisis. (i.e. house and car loans are theoretically secured also, but alot of them are worthless because the underlying assets have lost most of their value)
"IF" we had a cash only economy, as you're suggesting, then there would be no interest paid on savings either, which would make it quite hard for people to accumulate capital to start a business with in the first place....capital they would have to have because in your scenario there are no loans available....see where I'm going here?