When money is free, the rational lender will keep on lending until there is no one else to lend to.
Interpretation
This quote suggests that when borrowing costs are low or nonexistent, lenders will continue to extend credit until there are no viable borrowers left.
George Soros highlights the behavior of lenders in a market where money is readily available at minimal cost. The quote emphasizes that rational lenders will exploit the opportunity to lend extensively, leading to potential oversaturation of debt and financial instability if not monitored. It reflects concerns about credit markets and the implications of easy money policies on both lenders and borrowers.
In practice
This quote can be used in a discussion about current economic policies during a business conference.
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.
The collapse of the global marketplace would be a traumatic event with unimaginable consequences. Yet I find it easier to imagine than the continuation of the present regime.
Regulating and taxing marijuana would simultaneously save taxpayers billions of dollars in enforcement and incarceration costs, while providing many billions of dollars in revenue annually.
We are the most powerful nation on earth. No external power, no terrorist organization can defeat us. But we can defeat ourselves by getting caught in a quagmire.
My foundations support people in the country who care about an open society. It's their work that I'm supporting. So it's not me doing it. But I can empower them. I can support them, and I can help them.
The criminalization of marijuana did not prevent marijuana from becoming the most widely used illegal substance in the United States and many other countries. But it did result in extensive costs and negative consequences.
The real bosses in the capitalist system of market economy are the consumers. They by their buying and by their abstention from buying decide who should own the capital and run the plants. They determine what should be produced and in what quantity and quality. Their attitudes result either in profit or in loss for the enterpriser. They make poor men rich and rich men poor. They are no easy bosses.
People stop buying things, and that is how you turn a slowdown into a recession.
The budget should be balanced not by more taxes, but by reduction of follies.
To restore confidence in our markets and our financial institutions so they can fuel continued growth and prosperity, we must address the underlying problem. The federal government must implement a program to remove these illiquid assets that are weighing down our financial institutions and threatening our economy.
In reality there is no such thing as an inflation of prices, relatively to gold. There is such a thing as a depreciated paper currency.
It is my guiding confession that I believe the greatest error in economics is in seeing the economy as a stable, immutable structure.
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