In all its countless variations and applications, “credit” means money, i.e.,
unconsumed goods, loaned by one productive person (or group) to another, to
be repaid out of future production. Even the credit extended for a consumption
purpose, such as the purchase of an automobile, is based on the productive
record and prospects of the borrower. Credit is not . . . a magic piece of
paper that reverses cause and effect, and transforms consumption into a source
of production.
All credit transactions are contractual agreements. A credit transaction is
any exchange which involves a passage of time between the payment and the
receipt of goods or services. This includes the vast majority of economic
transactions in a complex industrial society.