posted on Oct, 16 2008 @ 09:47 AM
reply to post by GoalPoster
I think it is not necessarily a matter of using credit means one is living beyond their means.
For example, any time someone buys something online, using credit is the most efficient way to pay for it. That does not mean that the buyer is living
beyond their means... it is quite possible they pay the entire credit card bill each month.
Another aspect I heard recently is the concept of letters of credit. I don't understand it in detail but I gather the basic approach is:
Somebody (manufacturer) makes something. Somebody (distributer) else wants to buy a million of them for retail sale.
The normal method is that the distributor's bank sends a letter of credit to the manufacturers bank that says the distr. is good for the money. So
the mfgr sends the stuff, and then gets paid.
These letters of credit between banks is one of the things that is grinding to a halt.