The Magic Money Tree

[asperity]

  Douglas Adams, provides a lovely description of this of this:

“”Thank you. Since we decided a few weeks ago to adopt the leaf as legal tender, we have, of course, all become immensely rich.”
Ford stared in disbelief at the crowd who were murmuring appreciatively at this and greedily fingering the wads of leaves with which their track suits were stuffed.
“But we have also,” continued the management consultant, “run into a small inflation problem on account of the high level of leaf availability, which means that, I gather, the current going rate has something like three deciduous forests buying one ship’s peanut.””

From HHG by Douglas Adams.

[observer]

Talking of money trees:  there was a report on TV news last night about how youngsters are applying for insolvency to avoid their debts. Don't know how it works, but isn't this what they call "toxic debt" (as in the 2008 crash), and won't the rest of us eventually pick up the tab ?      

[Confused52]

I think the toxic was more the packaging of loads and selling the risk as high quality debt when the underlying debts were more risky than the resold debt claimed to be. The selling banks knew it would be toxic but just sold it anyway. In the case you mention the youngsters simply do not understand or care what happens to their financial standing but just want to disown the debt. The lenders are many and foolish in the latter case and closer to criminal than foolish in the former case since they knew exactly what they were doing.

Your point that we all pick up the tab in increased charges is true of course but the cautious lenders will survive better than the incautious where as in the 2008 event everyone suffered.

[Confused52]

I think the toxic was more the packaging of loads and selling the risk as high quality debt when the underlying debts were more risky than the resold debt claimed to be. The selling banks knew it would be toxic but just sold it anyway. In the case you mention the youngsters simply do not understand or care what happens to their financial standing but just want to disown the debt. The lenders are many and foolish in the latter case and closer to criminal than foolish in the former case since they knew exactly what they were doing.

Your point that we all pick up the tab in increased charges is true of course but the cautious lenders will survive better than the incautious where as in the 2008 event everyone suffered.

[observer]

Presumably we're talking about legal and even reputable, albeit irresponsible lenders, throwing loans at irresponsible borrowers; with an apparently impotent legal apparatus for debt recovery ?   In the case of the illegal lenders, I would imagine their methods of debt recovery will be much more effective !