Arguments 4 & post scriptum.

 Development needs borrowing. To increase demand for
commodities(1) and, particularly, to sustain demand
for commodities(2). Unlimited borrowing, which is
possible since the demise of the gold standard, should
lead to unlimited development. But the rules of
borrowing are such, that demand cannot increase in a
constant and regular way.
 The rules of borrowing concern the period of time a
loan is granted for. This can vary from a few hours to
30 years and more.
 The manner in which the debt is paid back, either
progressively, or all at the end.
 The interest paid.
  Amoung all this variety of borrowing, a simple case
can demonstrate the effect of these rules, on the
relationship between increased borrowing and increased
demand.
 Loans are granted for 5 years. They are repayable at
the end of the 5th year. Interest of 5% is paid every
year.
 Moreover, borrowing can increase in two different
ways. Either(1) the amount borrowed is the same every
year. Or(2) the amount borrowed each year increases,
to maintain a constant growth rate in demand.
 Round figures.

 1. At the start, total demand is 2000. Then, 100 are
borrowed every year. The first year, demand grows from
2000 to 2100, giving a growth rate of 5%. The second
year, interest of 5 is paid back and 100 are borrowed.
Demand grows from 2100 to 2195, giving a growth rate
of 4.5%.
Year 3: 10    , 100, 2195/2285, 4%
     4: 15    , 100, 2285/2370, 3.6%
     5: 20    , 100, 2370/2450, 3.3%
 The sixth year, interest of 25 and the first 100 are
paid back, and 100 more are borrowed. Demand falls
from 2450 to 2425, giving a growth rate of minus 1%.
Year 7: 30+100, 100, 2425/2395, -1.2%
     8: 35+100, 100, 2395/2360, -1.5%
     9: 40+100, 100, 2360/2320, -1.7%
    10: 45+100, 100, 2320/2275, -2%

 2. At the start, total demand is 2000. The first
year, 100 are borrowed. This gives a growth rate of
5%, which must be maintained from one year to the
next. The second year, demand must grow from 2100 to
2205 (+5%) and interest of 5 is paid back. 110 must be
borrowed.
Year 3: 2205/2315, 10    , 120
     4: 2315/2430, 15    , 130
     5: 2430/2550, 20    , 140
 The sixth year, demand must grow from 2550 to 2680
(+5%). Interest of 30 and the first 100 are paid back.
260 must be borrowed.
Year 7: 2680/2815, 35+110, 280
     8: 2815/2955, 45+120, 305
     9: 2955/3105, 55+130, 335
    10: 3105/3260, 65+140, 360

 In the first case, the growth rate in demand
decreases and turns negative the sixth year (-4.3
points).
 In the second case, borrowing increases and explodes
the sixth year (+85%).
 Comparing this with Schumpeter's curves - 1-year and
2-year debts for Kitchin, 5-year debts for Juglar,
10-year debts for Kuznets, 30-year debts for
Kondratieff - gives a convincing explanation of
observed reality.

P.S.
 A given currency draws the boundaries of a market.
[Most markets are national (rupee). Some markets are
international (euro). The dollar market is global for
crude oil, which gives it a special status.] This
means that, the exchange of commodities between
markets has no common currency. Which makes foreign
trade a bartering process, where commodities are
exchanged for commodities. With the inconvenience of
having to make exchanges on several markets, before
obtaining the desired commodity. Often, however,
exchanges between markets are direct, commodity for
commodity at an agreed rate of exchange.
 But commodities belong to two seperate categories.
And most markets export more commodities of one
category than the other. This has repercussions on the
exchanges inside these markets.
 Some markets export more commodities(2) than
commodities(1). The net result of this is that these
markets are exporting commodities(2) and importing
commodities(1). While other markets are exporting
commodities(1) and importing commodities(2). And, even
if the bartering process assures that equal values are
being exchanged, these exchanges are not balanced.
 In the first case, more commodities(1) are comming on
the market to supply an increased demand. And
commodities(2) are leaving the market. Foreign trade
brings development and reduces borrowing to sustain
demand for commodities(2).
 In the second case, commodities(1) are leaving the
market instead of supplying demand. And more
commodities(2) are comming on the market. Foreign
trade brings underdevelopment and increases borrowing
to sustain demand for commodities(2). While pushing
down prices and putting firms out of business.
 Regards, Kenneth  

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