/biz/ - Business & Finance

>>53815002
The theory is there needs to be some incentive to take the risk on lending money. But Jesus was not a fan.

Good question anon, but let's go deeper than that.
Ask yourself this question -

- Why does money exist?

Think about it - everything human beings currently do - all the goods and services we produce - can actually be done without money. Paper and numbers on a screen don't actually unearth natural resources, build bridges, or deliver food.
Rather, money exists as motivation and reason to do these things.

So, with that knowledge, we can concur that interest exists for the same reason.

>>53815002
Because the Jew is a vampire
Sent to dra-a-a-ain
Nation destroyers
Always giving white people the bla-a-a-ame
And what do we get for all that pa-a-a-ain

>>53815002
Would you loan me $1000 if I agree to pay you back in six months?

Probably not, right? You don't know me, you don't owe me anything, you don't really care if I have $1000 or not (even if I say "pretty please") ... you'd rather just hang onto your money.

Would you loan me $1000 if I agree to pay you $2000 in six months?

I bet you'd consider it ... loaning money to a complete stranger becomes more palatable if you get paid to do it. I don't know what that dollar threshold is for you, but there's some point where you'd consider loaning someone money that you otherwise wouldn't

>>53815115
Irrelevant example. Banks lend money into existence. People can't.

>>53815002
It's a word derived from Medieval Latin "interesse", and was originally a manner of skirting usury laws by basically charging for insurance against loss. Usury laws were often prohibiting the "sale of time", because it was believed that was what the modern equivalent of an interest rate was. The shift to it being explicitly about risk was a manner of pivoting away from concepts of selling time, so that the prohibition on usury wouldn't apply.

>>53815046
Money controls the allocation of resources. Without money, how do you decide how much funding any given endeavour should get?
>>53815002
It's the price of money. If I have $100 and you want $100, why should I give it to you? You might lose it on some dumb shit like Funko Pops. At the very least, I could buy something useful instead.
That's the textbook example, anyway. Nowadays, you monetize the credit note (the IOU that you get from the borrower) anyway, so it's all fake, gay, and bullshit.

Smart contracts will allow for new forms of differentiated interest which are more granular and which operate according to conditions which better meet the needs of both borrower and lender.

>>53815199
Usury is *profiting* from money lending. Charging rates only high enough to compensate for the risk of default is not usury.

>>53815046
Wrong, money exists because a medium of exchange is better than bartering.

>>53815002
Interest exists because of opportunity cost, time value, inflation, liquidity and credit risk.

>>53815115
i wouldn't loan it to you in the first place. at the same time if i liked you i wouldn't charge you much interest. also if you were doing something positive for society. i would give you more leniency.

>>53815496

>>53815435
Yes, like charging Mr. Tititcacaquius Nolej -80% and Wilbert Whitington 140%.

>>53815437
You can profit from "compensation for risk" in a manner that is indistinguishable from usurious money lending. That is why it's called "interest" even though we don't adhere to the concept of usury anymore. Usury now generally just means an egregious interest rate. But the term "interest", which as it is done now would've just been considered usury, was differentiated from the beginning by claiming to be compensation for risk of default. From what I remember it was signed as a separate contract, so you'd lend the money that was under the nominal condition of repayment of the principal alone, but you insisted that you'd only lend the money if they also bought insurance from you in case of default. The premium payments were what is now called "interest", and once the prohibition on usury was dropped lenders dropped the facade and just charged "interest" on the loan directly.

>>53815115
>Would you loan me $1000 if I agree to pay you back in six months?

money isn't real

>>53815699
>You can profit from "compensation for risk"
Wrong, by definition profit is revenue that exceeds outlay.

>>53815552
Are you seriously suggesting that money doesn't make things a lot easier just cause they've captured it?

>>53815002
It shouldn't exist, it's haram.

>>53815496
/thread

>>53815762
>but usury makes things easier, goy!
hit the bricks, lampshade

>>53815792
>reading comprehension of a two year old

>>53815756
I don't know what your point of dispute is. Are you saying insurance doesn't recognize a profit in their financial statements? The medieval lender that sells insurance on their loan profits if their principal is repayed and their operational costs aren't too high. It's the same concept as a modern loan, in a simple case an unsecured loan where the lender takes all the risk of default. But if the default doesn't happen, which the good lender will be able to avoid too many defaults, they profit.

>>53815823
keep coping shlomo

>>53815849

>>53815876
They're trolling, dunno why I've been responding. I just noticed they've only been making argumentative replies through the thread without really contributing anything.

>>53815848
Obviously it's usury if there are "operating expenses" at all. If there is a payroll then there are people who are profiting from the money lending.

>>53815002
Because in order to continue lending money, the banks need to profit. The interest generated is used to make sure the lender (the person who initially deposited the money to the bank) is able to withdraw their money and that interest is used to incentivize people to keep their money in the bank, so the bank can continue to lend.
All this "risk blah blah" shit is nonsense. That isn't how fractional reserves work. Interest is simply so the bank doesn't run out of money whilst lending, causing a bankrun.
>>53815180
Banks don't lend money into existence. They lend your money to someone else, which is why you can't withdraw your entire balance at one time.. If they loaned money into existence, bank runs wouldn't be a thing.
Multiple people own portions of the same money.

>>53815901
Yes I know. Your emotional involvement is the goal. It's good to learn to recognize it, and to never get emotionally involved in argumentation in the first place.

>>53815915
>Banks don't lend money into existence. They lend your money to someone else
WRONG. Every dollar a bank lends is created at the moment it is lent. It didn't exist before in any form.

>If they loaned money into existence, bank runs wouldn't be a thing.
It's not a thing or a problem when the bank is solvent. The problem only arises when they create more money than the value of the corresponding assets that they create.

>>53815901
Your posts don't make sense and you're not responding to my arguments.

>>53815938
Lol, nice pilpul. Just admit you're Jewish. No one else would defend usury so vociferously.

>>53815002
Because counterparty risk exists. Also the reward encourages lending without which efficient business is made more difficult. Interest turbocharges an economy.

>>53815002
share child p'0nr of course

>>53815002
To feed hungry jewish children, you antisemite.

Usury has been recognised as evil for millennia and modern usury is the fault of jews and their christian enablers

>>53815965
>WRONG
Wrong. Then bank runs wouldn't be a thing. If I put $1,000 in the bank and that bank loans you $900, only $1,000 exists. To prove this, if I went to the bank and tried to pull out my $1,000 it wouldn't be possible, unless someone else deposited money. Banks don't create money, they create movement of money that would be otherwise stagnant.
>It didn't exist before in any form.
I've never read anything so stupid in my life. Banks lend out money that people deposit. It's called a fractional reserve. You deposit $1,000 and the bank lends out 90% of that.
>It's not a thing or a problem when the bank is solvent.
R u dum? Bank runs are what cause insolvencies.

>I'm literally replying to a troll

>>53815915
>usury defender
>doesn't understand how banks work
lel

>>53816003

>>53816121
I'm not defending anything, just telling you dumdums how the system works. Without interest the banks would run out of money, and people wouldn't be able to withdraw the money they'd deposited.
It's very simple.

>>53816120
https://www.forbes.com/sites/francescoppola/2019/09/17/if-you-dont-understand-banks-dont-write-about-them/
https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy
https://www.sciencedirect.com/science/article/pii/S1057521914001070
>>53816191
But you are wrong

>>53816120
>To prove this, if I went to the bank and tried to pull out my $1,000 it wouldn't be possible, unless someone else deposited money.
Wrong. Liquidity is always available in the overnight market to cover any withdrawal. As long as the bank is solvent, it will have no problem obtaining physical cash.

>I've never read anything so stupid in my life. Banks lend out money that people deposit.
WRONG. You have it backwards. Banks CREATE deposits whenever they lend money. That money never existed before. It is created out of nothing. The Money Supply literally gets bigger every time a loan is issued.

>Bank runs are what cause insolvencies.
Lol, no. Bank runs have no effect on bank solvency. As long as their assets exceed their liabilities, there will always be liquidity providers at the ready.

You are clearly completely clueless how banking and the monetary system works. Educate yourself:
https://www.researchgate.net/publication/265909749_Can_Banks_Individually_Create_Money_Out_of_Nothing_-_The_Theories_and_the_Empirical_Evidence/link/55e0bd2e08ae2fac471c9fb5/download

>>53815915
>>53816208
Also I should mention that while fractional reserves do exist (even though they're not what you think they are) the federal reserve set them to 0% in 2020
https://www.federalreserve.gov/monetarypolicy/reservereq.htm

>>53815002
Usury is punishable by death

Usury (/ˈjuːʒəri/) is the practice of making unethical or immoral monetary loans that unfairly enrich the lender.

>>53816230
What prevents banks from loaning money to themselves? Are there regulations preventing this?
What do reserve requirements actually do?
What do banks do with customer deposits, besides buying government bonds?

>>53816378
look up Basel III

>>53816378
>What prevents banks from loaning money to themselves? Are there regulations preventing this?
Yes they do it all the time. I'm not sure of specific US regulation, which I assume is what you're after, but they're supposed to seek loans from other banks first, if they can't then the Fed will often act as a lender of last resort for them.
>What do reserve requirements actually do?
>What do banks do with customer deposits, besides buying government bonds?
Banks need them for customer transactions - if you withdraw money, send money to another institution or person or make a mortgage payment that doesn't result in new currency being issued from the central bank, it's base money that comes from customer deposits. The reserve requirements are supposed to be used so that these transactions can be fulfilled. Bank runs result in the plebs losing access to their money.
As I said here >>53816320 though reserve requirements in the US are currently 0% but varies by country
They also have things called liquidity reserves, which are assets that can be sold to cover 30 days (iirc) worth of expected transactions

>>53815002
does interest exist with gold as real money?

>>53815002
Memes aside, economically speaking interest is the price of time, more specifically time preference.

>>53816495
You can charge interest on anything, whether it's gold, silver, crypto, fiat or sea shells. Whether it can actually be paid or not is another issue.

>>53815773

>>53816495
Yes but rates are a lot more reasonable because no one is just printing gold to pay it.

Because if nobody was interested in anything, then nobody would be interested in doing anything.

>>53815002
Cool it with the antisemitic remarks

>>53815002
because time is literally money and if you want to bring forward purchasing power to the present from the future you need to pay for that privilege, based on the opportunity cost of someone giving that money to you instead of doing something productive with it themselves

also the concept of interest rates / discount rates is quite literally first-year undergraduate finance which tells you everything about the level of education and general intellect in these threads

“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”

-EINSTEIN

>>53817920
The same way any other business does, by learning how it works in house before ever hiring someone else. If you're just starting out, I would recommend looking at what they do (not trade) first and then see if there's something you could do better, or even something different entirely. Maybe they need you to sell them something they don't want or need, so offer to make them happy instead.

That said, be careful not to get stuck working as a salesperson (aka "gatekeeper") for them until you know what the fuck you're doing. You'll be expected to try to bring in new clients. A lot of people hate dealing with those people when their time is valuable, and it can cost money to train them. The trick is to always ask yourself why you were hired and always remember that if the client doesn't like you, no one else does either. And if you are the gatekeeper, always ask yourself how much you'd like to spend on your own success versus how many hours you'd like to spend being a cog in somebody elses machine. There isn't really a free lunch, especially in the world of financial services.

>>53815002
FAGGOT LOSERS FROM THE SCHOOL OF SALAMANCA

https://www.bitchute.com/video/UPpOyjaZCwDB/

>>53815496
you see both things are right

a)money serves a purpose as a medium of exchange

b)its a motivational dogma because without money being used as a 'score' in real life people wouldnt have the drive to start any kind of development

as i said both are right. now you can argue which was the first, and what is the side effect of it.

as a sceptic i must say i have the feeling money was invented to manipulate the human and that the purpose of exchange simply either became a side effect or was fully planned as a psychological scapegoat for the masses.

>>53815002
>Why does interest exist?

I highly recommend this 2022 book by Edward Chancellor, all about the history and concept of interest.

>>53821973
>yo check out my book
>1/2 million in gold
magnificent bastard.

>>53815002
lots of subhuman low iqs answering, the real answers are obvious:
>there is risk associating with lending money
>money in the present is objectively more valuable than money in the future
>no one would provide you this risk-based financial service if they stood to gain nothing for it
anything else is cope