Hacker News new | ask | show | jobs
by TwitBar 931 days ago
I don’t really buy it. Even a little bit of interest is 100% necessary for the creditor to break even. Statistically a debtor defaults. That loss is subsidized by the debtors who honor their agreement. Also: defining what “breaking even” actually means (and how to get there) is not a straightforward task. Currency inflation/deflation (past, present, and future), laws, penalties, enforcement, repossession, tax, fees, middlemen, statistics, “acts of God”, and general operating costs.

Creditors DO provide a service and interest rates exist on a sliding spectrum. This is just a debate over math and magnitude.
2 comments
MichaelRo 931 days ago
If you read the glorified "islamic zero-interest finance" here's how it works: you wanna buy a house so you borrow the money from the bank but the bank buys the house in your place and then sells it to you in periodic installments ... at a higher price of course. The house is yours after you finish paying the price that the bank asks for it. "No interest" though.

How is this different from interest? It's precisely what interest is. So phony.

Reminds me the old story about ultra-orthodox Jews who are prohibited by the Talmud from working or traveling during Shabbat (Sunday), except travel on water. So what they did when they needed to take the train on this day? They'd carry a basin and a bottle of water with them, seat down, take their shoes and socks off and put their feet into the basin then pour the water from the bottle in it. Voilà, commandment obeyed, traveling on water! No interest!

link
rijoja 930 days ago
That is really interesting, thank you for the information, I've been curious about this as well. In mathematical terms I suppose that would be the equivalent of fixed-interest loan with a fixed length more or less.

Also see special jew-elevators with a Shabbat-mode so that they always go up and down by every level so that you can use them without operating them, meaning that you can take the elevator on a Shabbat without tricking a gentile into pushing the button for you (1).

I was under the impression that Shabbat was on a Friday or Saturday. (nitpicking of course).

(1) So that they can go to hell instead of the jew, or whatever?

link
throwaway290 919 days ago
IANAJ but I've been curious about Middle East religions.

> So that they can go to hell instead of the jew, or whatever?

Anyone who follows https://en.m.wikipedia.org/wiki/Seven_Laws_of_Noah is an OK chap apparently, probably not as cool as a Jew but I guess not to burn either? Shabbath stuff is only important if you are a Jew.

> meaning that you can take the elevator on a Shabbat

If you are really strict and not disabled you would not use elevator even with this workaround.

> I was under the impression that Shabbat was on a Friday or Saturday

Outside of Israel some places switched to Sunday because otherwise too few people care.

link
rijoja 930 days ago
If you assume that you are out to break even, and not to try to reach another objective.

If it's about putting someone through education, then maybe it isn't about immediate short term financial gain.

Obviously you are correct that someone trying to make profit by lending will need to charge more money than they lend in a way or another.

My point is that if you have people out to gain profit from lending people money, they would wan't people to want things that they don't necessarily need.

link