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.
Economists love to talk about incentives, but the bottom line is that people hate being controlled or manipulated, even when done through voluntary institutions. This is one of the most important tensions in capitalism.
Passive commerce . . . should thus . . . [compel us] to content ourselves with the first price of our commodities, and to see the profits of our trade snatched from us, to enrich our enemies and persecutors. That unequalled spirit of enterprise . . . an inexhaustible mine of national wealth, would be stifled and lost; and poverty and disgrace would overspread a country, which, with wisdom, might make herself the admiration and envy of the world.
Most of the big banks were shot through with short-termism, deceptive practices and self-dealing. We must institute basic changes in corporate governance and in management practice to restore responsibility and honesty for the sake of the economy and for the self-respect of the country.
History proves... that a smart central bank can protect the economy and the financial sector from the nastier side effects of a stock market collapse.
Protectionism will do little to create jobs and if foreigners retaliate, we will surely lose jobs.
No complaint... is more common than that of a scarcity of money.
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