Apr 08, 2009 07:14
Notes from the constant running log of the Circumgyratory Spooling Noticulator-MK2 in attractive black. The quality of the penmanship, and thus the pen used in question, are both high. All running log entries in the noticulator start with a date and then entered one per ruled line by number and time.
I get a fair number of questions on banking. I am not a banker, nor an economist, nor an accountant, nor a Mostyn who may be all of that rolled together plus some. But I have the gist of the thing and I believe it works like this:
Most of Amber runs on a work-a-day payments-and-credits scheme. Say you need 50 Crowns to expand your shoppe. You go to one of the Houses and you ask for 50 Crowns in credit. You put your shoppe up for collateral. The House charges you a standard 5-and-1 -- you pay back 5 Crowns on your loan plus kick in 1 for interest a month over the life of your loan. If you cannot pay back, the House charges you just the interest. If you cannot pay that, the House possesses your collateral and either runs your business or sells it. It is unclear, if you cannot pay, what happens to you. House has mitigated risk on its side because either it gets interest or the business or violent vengeance.
Or, you can save all your money and buy into a House, if you're not already part of it, and get much more favorable rates on your loans. 3-5%, say, instead of 20%. Then you can live on rotating credit, especially if your business has volatility. If you walk down the streets by the Docks, the shipping businesses which all run on commodity prices are all flying House Chantris flags because it makes more sense for them to be bought into the House with strong shipping interests and get access to everything a House brings, including cheap money. Chantris gets their take at the end of the day, shipping happens off the Docks, theoretically everyone wins.
There's some interesting implications globally on monetary policy with this scheme. It does, however, make running the Lower City - or the whole City at that fact - with no stable Crown unbelievably headache-prone unless there is direct and clear partnership with the Houses.
Even more interestingly, in Begma, this scheme would be called "organized crime." But hey, nothing to see here, just move along.