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Thread: Value Added to Society by Idle Shareholders and Landlords

  1. #196
    Request Your Custom Title Now! Burgey's Avatar
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    Quote Originally Posted by weldone View Post
    Everything you said above is applicable to any democracy in the world. Yet nobody snatches the right to vote from the poorest and most uneducated people. Remember most people voting in a democracy have no idea about the intricacies of how governments work.
    I also think you need to take into account that people, inherently being arseholes, care a lot more about their material wealth than they do almost anything else.

  2. #197
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    Quote Originally Posted by weldone View Post
    Not 20x, maybe 5x-ish if you have 2 years of funding followed by 3 years of moratorium and 5 years of repayment (assuming 50% interest). Now name one successful tech company that will struggle with that.
    Why would a lender enter into a scheme where they see no return on their investment for five years, even an interest-only return? You just wouldnít do it would you?

    Lenders have their uber nerds working out various risks by reference to certain criteria all the time. They very rarely lose. The scheme youíre proposong would surely lead to a massive tightening of available credit because companies wonít lend where thereís no ROI for five years

  3. #198
    International Coach weldone's Avatar
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    Quote Originally Posted by Burgey View Post
    Why would a lender enter into a scheme where they see no return on their investment for five years, even an interest-only return? You just wouldn’t do it would you?
    Education loan exists, doesn't it?
    "Cricket is an art. Like all arts it has a technical foundation. To enjoy it does not require technical knowledge, but analysis that is not technically based is mere impressionism."
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  4. #199
    Request Your Custom Title Now! Burgey's Avatar
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    Not here they donít. You pay the govt back at a slightly higher tax rate once you enter the workforce. But thatís the govt


  5. #200
    International Coach weldone's Avatar
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    Many corporate loans currently exist where repayment starts after a few years. I know an iron ore mining company who took out a Bank loan on condition of starting to repay after a few years for obvious reasons. The mine itself was kept at mortgage. So this concept will not be new in the proposed system - will only become more common.

  6. #201
    Request Your Custom Title Now! Burgey's Avatar
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    And thatís fine if youíre an existing business and have assets which you can mortgage. What do start ups have?

  7. #202
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    Quote Originally Posted by Burgey View Post
    And that’s fine if you’re an existing business and have assets which you can mortgage. What do start ups have?
    Good point and that risk is compensated by the high interest rate. If you charge 40% compound interest for a loan that will be repaid at once after 5 years then $100 becomes $538 in 5 years. So lenders won't mind if 2 out of 3 startups fail. They're still getting back $538 for $300 in 5 years - that's a double-digit ROI.

  8. #203
    Request Your Custom Title Now! Burgey's Avatar
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    But if people are charged 40-50% for a loan, why would they take the risk of investing/ starting up? The cost of failure becomes completely prohibitive and stifles the initiative to start a business.

    There would need to be some structure in place where the principal of the business underwrites/ guaranteed the loan, right? Otherwise no one will lend the money because the borrower would just take off with the cash and get away with it because limited liability (and because of Burgeyís First Law).

    So youíd have a system where someone who wants to start a business is asked to underwrite a 40-50% compound interest loan using their own house/ assets. Who would do that? Why would you do that?

    I think what youíre proposing is basically a recipe for stifling investment and initiative.

  9. #204
    Request Your Custom Title Now! Burgey's Avatar
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    I guess what Iím saying is, people will have a crack if the cost of credit to get things going isnít too prohibitive, but of the cost of money is as high as youíre proposing, then I think the vast majority of people wonít take the risk.

  10. #205
    Request Your Custom Title Now! Burgey's Avatar
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    Itís all a moot point anyway, because everyone knows the best way to go is for the State to compulsorily acquire the means of production and to distribute the fruits of the labour of the workers equally among them, according to need. Economics 101. Works a treat.
    Furball likes this.

  11. #206
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    O yes, near-zero dividend for last few years will have to be a condition for declaring bankruptcy.

    People will take 40% interest loans when they are confident about getting a better return than that.
    Last edited by weldone; 12-03-2019 at 02:45 PM.

  12. #207
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    Quote Originally Posted by Burgey View Post
    It’s all a moot point anyway, because everyone knows the best way to go is for the State to compulsorily acquire the means of production and to distribute the fruits of the labour of the workers equally among them, according to need. Economics 101. Works a treat.
    That's a wrong spelling of worst

  13. #208
    Request Your Custom Title Now! Burgey's Avatar
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    Quote Originally Posted by weldone View Post
    O yes, near-zero dividend for last few years will have to be a condition for declaring bankruptcy.

    People will take 40% interest loans when they are confident about getting a better return than that.
    How many 40% pa RsOI are there? There arenít any. If people say there are, itís Who the Hell is Hamish stuff.

  14. #209
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    Quote Originally Posted by Burgey View Post
    How many 40% pa RsOI are there? There aren’t any. If people say there are, it’s Who the Hell is Hamish stuff.
    all successful tech startups

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    I for one welcome a world where I can't buy dinner from a local restaursnt but can buy a sweet, sweet FinTech app.
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