Increasing borrowing to reduce borrowing.

[andygardener]

But surely it's better the farmer remains productive than saying to himself "well stuff this then, I'll leave my land to itself and do nowt and the bank can do one". If that was the case then the bank and the farmer lose out, with a more balance approach they could both be winners.

 

We are in annologies here. We're borrowing money to give to china, who we're borrowing money from. Not productive. We are borrowing money to waste, hence the ammount we owe keeps going up.

[WeX]

But surely it's better the farmer remains productive than saying to himself "well stuff this then, I'll leave my land to itself and do nowt and the bank can do one". If that was the case then the bank and the farmer lose out, with a more balance approach they could both be winners.

 

The thing is, gnvqsos's comments rely entirely on the benevolence of the bankers in his comments not wanting their money nor the interest on said money over the time of the holiday. This simply does not happen as the bankers will need to forgo their own incomes. Banking is a business to. gnvqsos's example is simplistic and pays no attention to the reality of the issue, neither does it address the actual problem. Its a lose/lose situation payed for by a brief respite from the farmers ills. Nothing is resolved and the problem has just been pushed further down the road, presumably for someone else to deal with.

[Uptowngirl]

The debt must be cancelled.

 

.

 

And how does that happen? Are you suggesting we should default on our obligations and become another Zimbabwe?

 

That's where they want you, signed up to a large debt, and paying well over the odds for a roof above your head.

Mortgage = slavery.

 

Lots of the debt and problems are due to the excessive housing debt.

 

So have your alternative life style choices left you with limosines and a millionaire lifestyle whilst the rest of us struggle by with our BMWs and semi detatched suburbia?

[anywebsite]

So what happens to the debt while the farmer is having his payment holiday? I'll tell you, it gets added to the debt he already has meaning his repayments are increased, leaving the farmer with a short term gain but an even bigger problem in the long term. So the following year he has to do the same, and the year after and so on until the bank decides he is no longer a viable concern and takes his farm from him.

 

What happens to the debt if he can't afford to farm any more because of paying debt repayments & a refusal to borrow what is necessary for them to continue farming? What if all the other farmers were forced out of business by the bank's refusal to lend & then the farm is worthless because nobody can get a loan to buy it?

 

You don't pay your debts back by cutting your income.

 

As long as you can make more than the interest on the loan, then that's an investment, that's how people, companies, banks & countries make money. It's an easy calculation to do & interest rates are very low.

[Uptowngirl]

What happens to the debt if he can't afford to farm any more because of paying debt repayments & a refusal to borrow what is necessary for them to continue farming? What if all the other farmers were forced out of business by the bank's refusal to lend & then the farm is worthless because nobody can get a loan to buy it?

 

You don't pay your debts back by cutting your income.

 

As long as you can make more than the interest on the loan, then that's an investment, that's how people, companies, banks & countries make money. It's an easy calculation to do & interest rates are very low.

 

The problem arises when the level of borrowing/debt gets to a level where lenders feel unsure that you will be able to repay what you owe. With increased uncertainty comes a higher perception that there will be a dafault and because of the increased risk the interest rate increases. This has a far more profound effect on the debt than making a few cutbacks to try to keep the debt in check.

Once you arive at the point where interest rates start to spiral upwards there probably isn't a way back. eg Greek government debt.

[WeX]

What happens to the debt if he can't afford to farm any more because of paying debt repayments & a refusal to borrow what is necessary for them to continue farming? What if all the other farmers were forced out of business by the bank's refusal to lend & then the farm is worthless because nobody can get a loan to buy it?

 

You don't pay your debts back by cutting your income.

 

As long as you can make more than the interest on the loan, then that's an investment, that's how people, companies, banks & countries make money. It's an easy calculation to do & interest rates are very low.

 

you're neglecting the issue of the farmer being unable to service the debt and produce. In this scenario the farmer requires a payment holiday to get started again, but the OP failed to factor in the compounded interest and assumed the bank would be happy to do this. This simply does not happen in the way the OP explained. Payment holidays do exist but not at this scale as otherwise banks would be losing a lot of revenue.

 

if the interest payments is so high the farmer cannot afford them, piling on more debt is not going to resolve the issue.

[chem1st]

And how does that happen? Are you suggesting we should default on our obligations and become another Zimbabwe?

 

No, we do it like Iceland. Zimbabwe's problem has been external trade barriers.

 

 

So have your alternative life style choices left you with limosines and a millionaire lifestyle whilst the rest of us struggle by with our BMWs and semi detatched suburbia?

 

I can stay in bed in the morning.

 

If you don't get up to go to work, then you can wave bye bye to your bmw's and suburbia.

[truman]

If you don't get up to go to work, then you can wave bye bye to your bmw's and suburbia.

 

Not necessarily....could be a landlord..easy money..no work/getting up involved

[chem1st]

Not necessarily....could be a landlord..easy money..no work/getting up involved

 

But how you going to sleep at night and keep your head come the revolution?

 

Better to go for the simple pleasures in life. Take your pleasure from planting some flowers rather than exploiting the poor through the land monopoly (whilst you yourself are being exploited by the currency monopoly).

[JFKvsNixon]

But how you going to sleep at night and keep your head come the revolution?

 

Better to go for the simple pleasures in life. Take your pleasure from planting some flowers rather than exploiting the poor through the land monopoly (whilst you yourself are being exploited by the currency monopoly).

 

What if you became a landlord that exploited the rich by renting out houses in S10?