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Old 10-08-2018, 04:18 AM
Danny B Danny B is offline
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Join Date: Oct 2012
Location: L.A. Ca.
Posts: 4,599
productivity vs speculation,,,global cooling

"Jerome Powell said the central bank has a ways to go yet before it gets interest rates to where they are neither restrictive nor accommodative."
In Sharia-compliant banking, the bank is exposed to the risk of investment, NOT just the risk of default of the borrower.
The Bank of North Dakota only loans money for productive investments, NOT for speculation. The Bank of ND is more profitable than the NYC banks.
When Powell talks about interest rates being either restrictive or accommodative, he is, for the most part, talking about interest rates for speculation, NOT productivity. The money loaned for speculation is at far higher risk than money loaned for production. The 2 should have entirely different interest rates. The Bank of ND only loans money that has a dedicated cash stream to finance repayment.
So what happens when you loan money for a purely speculative purpose that isn't directly connected to any kind of productivity?
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