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A comment on US Business Booms and Depressions Since 1775 (1943). Parent comment

Re:US Business Booms and Depressions Since 1775 (1943) by ryandrake on Tuesday May 21, 2024 @05:36PM (#40434309)
I guess if you have, say, $50 billion in assets, you can take out a new $5 million loan each and every year, and by the time you die, and never have to pay yourself back. You've barely leveraged 1% of your assets. Their reality is unfathomable to us little people.

$5 million, to someone that rich, is like $50 dollars to us. It's chump change you might find laying around your house.

[ Parent | on HN ]
Re:US Business Booms and Depressions Since 1775 (1943) by mitthrowaway2 on Tuesday May 21, 2024 @06:33PM (#40434864)
Furthermore borrowed money increases the money supply, and at that scale, the money you're borrowing can even be used to increase the price of the assets that you're using as collateral, allowing you to borrow even more.

It can also unwind just as quickly if you need to pay those debts back in a hurry, causing your asset prices to tumble on the way down. But if you're big and have borrowed enough money, whole jobs and industries will be dependent on your continued solvency, and so you can sometimes maneuver to put the public on the hook.

[ Parent | on HN ]