Why can't loans be just that? And loan-based-investments share losses/wins? Why do we allow this noxious economical tool of "interest" - How the hell is $2 worth $15 (and keeps increasing) just because you loaned it to someone?
Why is usury allowed? Any historical back up for this?
>Unironically using the word Usury when referring to interest.
I bet you want to make this about the Jews or something.
Get out /pol/.
Or ISIS, whoever you are.
Are you retarded perhaps?
Also not Veeky Forums.
for all economic question. thank you
Because except in very rare edge cases, X amount of money today is worth more than the same X amount of money tomorrow. If you don't have some mechanism like interest,loans usually lose real wealth for the lender.
The fuck does ISIS have to do with this?
Isnt that circular? Markets increase/decrease because interest-based loans are allowed and gambling/betting on the market is allowed?
ISIS sought to combat "Le Jewish Global Financial System" by planning to issue gold/silver/copper coins once they have their meme caliphate set up.
I think it remained in the conceptual stage. Dunno if ISIS have chests of gold somewhere.
So interest levels have to be tied to inflation levels?
>Markets increase/decrease because interest-based loans are allowed
lol stormfags
JEWS DID ERRYTHANNNNNNGN GOTTA BELIEVE ME GUYS
>What is risk for $200, Alex
>Isnt that circular?
No.
> Markets increase/decrease because interest-based loans are allowed and gambling/betting on the market is allowed?
You're putting the cart before the horse here.
At least in a normal, healthy economy, availability of goods and services tends to grow faster than population. People work, build things, and especially if part of that production goes into reinvestment which allows for future increases in productive capacity, this cycle keeps working in on itself until it hits some kind of barrier. That's what drives the value engine.
Here, let me give you an example. I want to build a factory, to produce automobiles. To make that factory work, I'm going to need a certain amount of initial investment, enough to get materials, hire workers, build the facilities, etc. Once that's all up and running, I can start creating cars and selling them, and if I've done my homework and runthis factory and business well, start earning a profit.
But let's say I don't have the money on hand to purchase all the things I'm going to need to get this factory started and hire the right people. So I have two real options.
>Borrow money in order to raise the funds needed.
>Work at some other kind of income producing job so I can get the funds I need.
Option B, whatever its other merits, is slower. Depending on how much money I need and what my alternative income producing options, it will take me a certain amount of time to work for the amount I need, in which time my factory is not producing, because it doesn't exist. By lending money, whomever has done so creates the value of the factory for all the days that it would not have been in operation had I been forced to wait.
And to the growth levels of the economy, which gets complicated because inflation itself is often tied to growth levels, as well as ease of lending.
What about interest rates higher than inflation?
Look up the term "alternative cost".
I'm not following the question. What about them?
How are loan businesses supposed to make money if all they do is give out money and receive it at exact interests?
It's basic economics that you don't seem to understand.
exact amounts*
Should they be permitted?
On what criteria? I don't pretend to make policy, nor set myself up as an arbitrator of right and wrong. Because you seem to be asking a moral question and not an economics one.
They could provide good service in order to get tips from people if their service was good.
If you're giving out a loan to someone who is trying to build a business, then it should be an investment and you both share the losses and wins.
However, the other borrower are people who are in NEED of money for food, rent, etc. To make "business" out of needy people is not a business but a scam.
The whole concept of "Ima make a business out of lending money to desperate people making them practically debt-slaves" should not be allowed.