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10/30/11(Sun)10:57 No.129387Artificially
low loans, provide a means for corporations and businesses to absorb
huge amounts of debt, while paying an incredibly small fraction of
interest. This means that the massive revenue stream generated by these
business can easily pay the interest and minimum payments off on these
loans, while still having massive cash production. The larger your
organization, the more debt you can carry, with minimal risk, as long as
the Fed. Reserve grantee's ultra low interest rates. However small
businesses do not have the same access, or the same revenue stream to
protect themselves from these loans, so they cannot benefit or, benefit
far less then the corporations, and large businesses. This means that
large businesses can expand more (yes more jobs), but will take up the
market space of the small businesses. This leads to a consolidation of
power and while not necessarily a monopoly, a huge control of the market
share.
This leaves little room of opportunity for small
companies to grow. Humans are most likely going to follow the path of
least resistance, and shop where its cheaper. Its cheaper for them to
deal with the big firms, who will give them a better deal, because at
this point they have less risk on there cost. The small business, every
transaction is needed. On top of that the larger company can use its
size, and borrowed money, to invest in other things, like market
research, and advertising. So while Cappo's pizza down the street is
great, and even only a few dollars more then Domino's, people locally
may still want Cappo's b/c its better, but Cappo can not expand out side
of his neighbourhood, or else he needs to build a whole new base in
this new area. While Domino's can advertise from Tulsa, to Portland,
assuring customers you'll get the same great (shit) pizza nation wide.
This strengthens Domino's while weakening Cappo. |