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To: neolib who wrote (98902)	1/4/2008 1:20:44 AM
From: lifeisgood	Read Replies (1) \| Respond to of 306849

Of course this is true but it is still the creating, not the borrowing that produces wealth. best... LIG

To: neolib who wrote (98902)	1/4/2008 1:33:32 AM
From: Elroy Jetson	Read Replies (1) \| Respond to of 306849

Everything which can be created through borrowing could just as well have been facilitated through equity investment. The "magic" of debt is way over-sold in the society we live in. Ronald Reagan said debt doesn't matter . . . but it does. .

To: neolib who wrote (98902)	1/4/2008 7:28:17 AM
From: Tommaso	Read Replies (4) \| Respond to of 306849

To say "borrowing does not create wealth" is, as you point out, to ignore the way that the economic world works. It's the kind of moralizing statement that may be good advice for a ten-year-old, the kind of thing that Shakespeare made the old fool Polonius tell his son in Hamlet. One extraordinary example of borrowing and creating personal wealth was the way John Templeton made his first big advance in the direction of becoming a billionaire. About 1939 he borrowed $10,000 (a very large sum then) from his broker boss and bought a hundred shares of every NYSE stock then selling for less than a dollar a share. Orders poured in for war materials, U.S. businesses boomed, and in four years Templeton had a $40,000 profit. There are millions of examples of Americans who have borrowed to start successful businesses. This is what is known as capitalism. The fractional reserve banking system, developed over centuries from the activities of early Renaissance goldsmiths, has made possible the extension of credit, the increase in the money supply that is coterminous with the expansion of credit, and most useful economic activity. The overextension of credit in the last ten years has created a huge surplus of dollar-denominated accounts around the world--the classic case of too much money that will soon be chasing too little oil and food. Anyone with the economic perspective of a ten-year-old will not understand this, and will simply be a victim of it. Ignorant moralizing about complex economic mechanisms will not solve the problem. EDIT: There's a top story in today's Wall Street Journal that has an encouraging tone of sanity: Inflation Fears Might Trump Calls for Another Big Rate Cut Monetary-Policy Makers Appear to Have Less Room To Maneuver Than in Past