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.
What Wall Street and credit card companies are doing is really not much different from what gangsters and loan sharks do who make predatory loans. While the bankers wear three-piece suits and don't break the knee caps of those who can't pay back, they still are destroying people's lives.
One way to have broader access to wealth is to reduce the tax on the large group and increase the tax on the very top so concentration of wealth doesn't get to extreme levels.
In a sense, the market, by expecting a fall in prices, discounts that fall and makes it happen right away instead of later. Expectations speed up future price reactions.
COMMERCE, n. A kind of transaction in which A plunders from B the goods of C, and for compensation B picks the pocket of D of money belonging to E.
Really, the proper study of economics is fulfilment, not consumption... It doesn't even matter if it's a green product or a green house... It's still consumption. What matters in this world is the fulfilment of people's needs and the fulfilment of their aspirations.
I have come to a resolution myself as I hope every good citizen will, never again to purchase any article of foreign manufacture which can be had of American make, be the difference of price what it may.
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