Just because it sounds silly on its face doesn't make it not true. The basic premise is solid: many of the most successful corporations today make a large portion of their profit from convincing customers to park funds in their accounts, and investing that money in financial instruments.
Everyone's got millions of unsecured creditors at zero interest. What could possibly be problematic about that?
That's only a useful question if you're an entrepreneur trying to answer the question of "How do I get in on this game?" The question currently being asked is closer to "Is it a problem for society that so many players are in on this game?"
If every big business is just a moat and/or backdoor for banking, that might be indicative of a problem.
Sure but the problem might be internal find-the-lady accounting.
In fact it probably is. Much like internet advertising has to be. You can't have an entire economy based around free services funded by advertising for other free services, you can't have returns generated solely by investing in companies that invest in other investors. Unless massive numbers of private sector backers have been defrauded, the lady is somewhere. Though maybe not somewhere that taxman looks.
I might buy slighter fewer Starbucks, or Fords, or flights if they were no loyalty programs, but I'd be spending zero money on StarBank/FordBank/DeltaBank without the product to go with it.
why is it a problem, if it means that these funds are _more_ efficiently allocated?
For example, buying a starbucks gift card is money being invested by starbucks (elsewhere) and generates a profit. Had the customer not purchased such a card, would the cash have been invested in a similarly efficient manner? Or would it be in the proverbial cash-under-the-bed and not generating any returns?
> All and all, frequent flyer points are a massive business for airlines. According to some valuations, these programs are worth just as much as the airline itself.
This alternative currency that's been around long before cryptocurrency... is more significant / interesting than your cat printing money.
The original assertion is ambiguous - we can't determine if the GP meant that their cat operates a printing press that outputs currency, or that the cat itself outputs currency.
The only really interesting breakdown I’ve seen along these lines was a dissection of how cheap Starbucks’ cost of capital is due to their gift card system. It’s quite a remarkable business they’ve created totally apart from selling coffee!
In my opinion frequent flyer points are only interesting to consider in terms of the implications of a currency that will only get shittier over time.
They're notably distinct in that you can simply exit their system and choose not to participate. Calling them banks is apt, I suppose, but calling them central banks takes gravitas away from the most heinous, utterly unethical institutions that are the actual central banks.
That's not going to happen. Our finial system depends on centralization (not that I agree with that) and if your talking about crypto that's just another level of control we can't quite see yet.
Everyone's got millions of unsecured creditors at zero interest. What could possibly be problematic about that?