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To: elmatador who wrote (43311)12/1/2008 1:20:41 AM
From: Haim R. Branisteanu  Read Replies (1) | Respond to of 219688
 
Elmo as an INDIVIDUAL you acted wisely and you converted your money into assets you need, but did not generate any additional DIRECT workplace.

Business acts differently – let say I am a fertilizer company – in EU sell natural fertilizer I process from minerals and sell to the farmer in Brazil – I need to process the stuff in April May ship it in June so the Brazilian farmer will get it by August September – spreading it over his fields shortly thereafter and being able to pay me only in March April after he collects and sells the crop he grew.

Now for this some one in the chain of production needs credit totaling one year of production, shipping and other costs.

Without this credit the farmer still can grow crops which will yield at least 25% to 35% less, increase crop prices and as a result inflation and generate stagnation as the farmer business will not expand the fertilizer company will not exist and the shipping company will need less ships and employees and the steel mill will produce less steel used in ships etc…. and so on.

The question is which scenario is better for the world at large – one with responsible credit to produce more crops or gadgets or without credit and only savings like you? – BTW if there will be only saving who will pay you interest?

Inflation will still exist because this is human nature to exploit situation to maximize prices if demand is rising even temporary on any service crop or gadget.

Banks were established for allocating capital (your savings) wisely and make YOU share part of the return on Capital via interest rates - more modern venues where allocation of capital via interest in economic viable companies and distribution of their profits to YOU if by shares appreciations or dividend.

Unfortunate uncalled for and excessive greed and lack of supervision of a system that benefited the whole social spectrum and world went “bizark” several times since inception.

That is why all those participating in the latest orgy should go to jail with forced labor for substantial time, so at least one or two generation will remember that excessive greed and speculation and manipulation for personal gain is punishable.

Unfortunate neither in the US or Europe or in any other place financial markets are functioning and banks are operating the laws are not enforced properly and speculation and manipulation still exist