Sunday, October 23, 2011
Finance eats own?
"Finance, like time, devours its own children." -Honore de Balzac
In this Occupation Wall Street environment, many will nod their heads in agreement. Yes, yes, finance eats its own. The Balzac quote has often been used, but it is not exactly clear what was meant by the comment. The quote is from The Firm of Nucingen and refers to the making of family dynasties in banking.
He is also the author of:
Behind every great fortune is a crime.
I have the view that this could be viewed as a commentary on the time value of money and risk in borrowing rates. The cost of capital and continual borrowing will devour the borrower if there is not prudence in its use. There will always be a day when debt are due....