When money is free, the rational lender will keep on lending until there is no one else to lend to.
Interpretation
This quote suggests that when borrowing costs are low or nonexistent, lenders will continue to extend credit until there are no viable borrowers left.
George Soros highlights the behavior of lenders in a market where money is readily available at minimal cost. The quote emphasizes that rational lenders will exploit the opportunity to lend extensively, leading to potential oversaturation of debt and financial instability if not monitored. It reflects concerns about credit markets and the implications of easy money policies on both lenders and borrowers.
In practice
This quote can be used in a discussion about current economic policies during a business conference.
The securitisation of mortgages added a new dimension of systemic risk. Financial engineers claimed they were reducing risks through geographic diversification: in fact they were increasing them by creating an agency problem. The agents were more interested in maximising fee income than in protecting the interests of bondholders. That is the verity that was ignored by regulators and market participants alike.
The collapse of the global marketplace would be a traumatic event with unimaginable consequences. Yet I find it easier to imagine than the continuation of the present regime.
Regulating and taxing marijuana would simultaneously save taxpayers billions of dollars in enforcement and incarceration costs, while providing many billions of dollars in revenue annually.
We are the most powerful nation on earth. No external power, no terrorist organization can defeat us. But we can defeat ourselves by getting caught in a quagmire.
My foundations support people in the country who care about an open society. It's their work that I'm supporting. So it's not me doing it. But I can empower them. I can support them, and I can help them.
The criminalization of marijuana did not prevent marijuana from becoming the most widely used illegal substance in the United States and many other countries. But it did result in extensive costs and negative consequences.
The gap in India has always been between the promise and the execution.
Industry entirely left to itself, would soon fall to ruin, and a nation letting everything alone would commit suicide.
It certainly is dangerous that there are only a few clubs left in Europe that can afford to pay millions. At the end of the day however, the spectators decide the rates of pay - by watching the games and consuming the goods and services advertised on sports TV programmes.
It had been held that the economic system, any capitalist system, found its equilibrium at full employment. Left to itself, it was thus that it came to rest. Idle men and idle plant were an aberration, a wholly temporary failing. Keynes showed that the modern economy could as well find its equilibrium with continuing, serious unemployment. Its perfectly normal tendency was to what economists have since come to call an underemployment equilibrium.
Deficit spending is simply a scheme for the 'hidden' confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.
The trouble with the profit system has always been that it was highly unprofitable to most people.
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