In simple terms, the plan is to raise money through donation, use it to buy up distressed debt, and then cancel that debt. There's a Telegraph piece on it here. The launch party is on 15th November (this coming Thursday) so you'll hear plenty about it, if you've not already.
Obviously, this sort of thing fascinates me.
When I read about the plan for the Rolling Jubilee though, something immediately popped into my head. My searches haven't exactly been exhaustive, but so far I've not found anyone else raising this question. And it seems like an obvious one:
If demand for distressed debt rises, against a relatively fixed supply, so does price. Paying more for debt means that competing firms will have to work harder to realise the same value from any distressed debt package. In this case "work harder" means causing more distress to debtors. Isn't this project self-defeating?Now, of course if Rolling Jubilee were to buy up all the distressed debt, then everything will be fine. Debtors will be forgiven. Creditors will have got their asking price. Those donating to the campaign will be able to feel they'd achieved their goal. But that's not really the case, is it? Rolling Jubilee aren't seriously thinking they can buy up all the distressed debt are they? (There are obvious price implication to this, too)
The other end of the scale is that Rolling Jubilee buy up such a small amount of debt that it has virtually no impact on price. But that doesn't seem like it's aim to me. They seem to want to make a real difference. Unless, they believe that it's the symbolism of what they're doing that is most important. But that seems somewhat deceitful to the folks that donate money.
So I'm a little confused. If anyone has an answer I'd be pleased to hear it.