(Jim wrote:-) In my opinion, the problem with Vic's statement is that it focuses solely on "call loans", which, as you state below, do not represent most financing arrangements.
I think the point that should be made is that banks have the power to set the terms of any loan, and according to those terms, the loans most often get repaid before the goods that they brought into existence can be consumed, and this produces a "gap" between income and prices.
(Joe replies:-) I'm sure there are a great many more ways of 'financing' available now than there were in Douglas's time. So I think there would be quite a bit more flexibility nowadays in regards to 'terms' than was once the case.
But the business still has to have 'prospects' of success, and likely produce financial projections of viability, or have very solid collateral security, or both.
And I don't think you'd find any banker, even from the Canadian government's own Business Development Bank, ("the lender of last resort", as it used to be known), who'd want to extend the period of repayment past the expected life of the asset being financed. Unless he had a death wish for his bank.
I would think that a properly constituted National Credit Office would record and make the necessary corrections in regards to having sufficient effective demand available in the economy as a whole in order to bridge the collective 'gap' that develops from this cause.
Re: [socialcredit]
Reply to this message
