Barclays recently admitted to '"fixing" interest rates illegally. Faith is usually a religious term, or a phrase from a George Michael song. But actually, our whole economic system is based on faith.
While a roofer will ask for a portion of the fee before beginning the job, it is the last payment that holds all the profit for the contractor. He has to have faith that the final payment will be made. And the home owner who gives the initial payment has to have faith that the roofer will not disappear before the job is done.
Here in Idyllwild a few years ago we had a contractor who was promising to build log homes at a very competitive price—too competitive. One customer came to my retail lumber business. We told him the competitor’s price was too low—but the customer had faith. That was a mistake. He lost his 25% deposit—and we ended up with the contract to supply the lumber for the house.
If we lose faith in each other and in the system, the system will collapse.
I mentioned before a game my boys and I played on the Shoney kids’ meal menu. You flipped a coin to move. Heads you went one space, tails you went two. There was one spot on the map where you could not progress unless you could move three spaces. We had no three sided coin. We quit playing the game when we understood that the game was unplayable.
Our faith in the system, like the unfortunate customer I mentioned, may be is misplaced.
The show “Capital Account” talks about this.