The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: XoFruitCake who wrote (150318)	9/25/2008 2:33:17 PM
From: neolib	Read Replies (3) of 306849

Even big retailer like Walmart, Target etc.. use short term facilities to finance their inventory.. I don't know many companies that can operate without access to commercial paper or short term loan facility.. They borrow from someone, how did those people get the money? From commerce of one sort or another. So perhaps what we should do is restructure our financial systems so that companies retain more earnings and self finance their businesses, rather than turning to credit sources, or at least shift the balance more in that direction (clearly lots of self financing already exists, and one would likely not want to eliminate all credit from the system). Following quote is from Mortimer Zuckerman in this weeks US News editorial: Without credit, the domestic private economy cannot generate profits, and without solid profits the health of lenders and the availability of credit will deteriorate even further I don't believe the bold section above. You can clearly structure an economy with zero credit. It would likely have slower GDP growth than one with credit. It would likely be a more stable system as well.

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