Credit is a system whereby a person who can not pay gets another person who can not pay to guarantee that he can pay.
Interpretation
Credit relies on trust between two parties who both lack the ability to pay, creating a complex financial relationship.
This quote by Charles Dickens critiques the nature of credit systems, illustrating a paradox where individuals unable to pay engage others, also likely unable to pay, to assure financial transactions. It highlights the irony and dysfunction often found in financial systems that rely on credit and guarantees rather than actual liquidity or financial stability.
In practice
In a lecture on economics, one might use this quote to discuss the flaws in modern banking systems.
I recollected one story there was in the village, how that on a certain night in the year (it might be that very night for anything I knew), all the dead people came out of the ground and sat at the heads of their own graves till morning.
A silent look of affection and regard when all other eyes are turned coldly away-the consciousness that we possess the sympathy and affection of one being when all others have deserted us-is a hold, a stay, a comfort, in the deepest affliction, which no wealth could purchase, or power bestow.
Heaven knows we need never be ashamed of our tears, for they are rain upon the blinding dust of earth, overlying our hard hearts. I was better after I had cried, than before--more sorry, more aware of my own ingratitude, more gentle.
There are not a few among the disciples of charity who require, in their vocation, scarcely less excitement than the votaries of pleasure in theirs.
You might, from your appearance, be the wife of Lucifer,” said Miss Pross, in her breathing. “Nevertheless, you shall not get the better of me. I am an Englishwoman.
Christmas is a poor excuse every 25th of December to pick a man's pockets.
In other words, the percentage change in book value in any given year is likely to be reasonably close to that year's change in intrinsic value.
If the fluctuations in your investment portfolio are reduced, the impact of emotions and behavior on your account is also reduced.
The securitisation of mortgages added a new dimension of systemic risk. Financial engineers claimed they were reducing risks through geographic diversification: in fact they were increasing them by creating an agency problem. The agents were more interested in maximising fee income than in protecting the interests of bondholders. That is the verity that was ignored by regulators and market participants alike.
We are all powerless as children, and money looms so powerfully... we don't grow up to claim our financial power until we look money directly in the eye, face our fears, and claim that power back.
Any bull market covers a multitude of sins, so there may be all sorts of problems with the current system that we won't see until the bear market comes.
Everyone recognizes that's a joke because obviously the number and shape of the pieces doesn't affect the size of the pizza. And similarly, the stocks, bonds, warrants, etc., issued don't affect the aggregate value of the firm.
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