<html><head><style type="text/css"><!-- DIV {margin:0px;} --></style></head><body><div style="font-family:arial, helvetica, sans-serif;font-size:12pt"><DIV>I think this is the main issue here. I doubt many microlenders are creating new money. Central banks and other established banks under the current system do create new money, but my impression is microlenders merely lend out of their existing money stock and don't create any new money stock to back loans or deposits.</DIV>
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<DIV>And my point was merely that there's nothing wrong per se with charging interest on loans. One might criticize either fiat money or fractional reserve systems, but that's entirely separate from the issue of charging interest on loans. Also, further, there's no objective, scientific way to say that freely agreed upon interest rates (or any other prices) are too high or too low. (Of course, we live in societies where there's massive manipulation of interest rates and other prices, though, to my knowledge, microlenders are not part of the manipulation and seem to represent a way of dealing with current credit systems. I think complaining about them is merely misguided at best or so much demagoguery at worst. In this case, it's notable that politicians and government economists are doing the complaining -- not the borrowers serviced by microlenders. To me, this is typical of much anti-market rhetoric: the people actually involved are not
complaining -- just outsiders who seem to either not have a clue or who actually are just looking for an issue to grandstand on.)</DIV>
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<DIV>Regards,</DIV>
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<DIV>Dan</DIV>
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<DIV style="FONT-SIZE: 10pt; FONT-FAMILY: arial, helvetica, sans-serif"><FONT face=Tahoma size=2><B><SPAN style="FONT-WEIGHT: bold">From:</SPAN></B> Samantha Atkins <sjatkins@mac.com><BR><B><SPAN style="FONT-WEIGHT: bold">To:</SPAN></B> ExI chat list <extropy-chat@lists.extropy.org><BR><B><SPAN style="FONT-WEIGHT: bold">Sent:</SPAN></B> Wed, November 24, 2010 1:43:02 PM<BR><B><SPAN style="FONT-WEIGHT: bold">Subject:</SPAN></B> Re: [ExI] Micro-loan programs not as successful as hoped<BR></FONT><BR><BR>On Nov 23, 2010, at 6:38 AM, Stefano Vaj wrote:<BR><BR>> 2010/11/22 Dan <<A href="mailto:dan_ust@yahoo.com" ymailto="mailto:dan_ust@yahoo.com">dan_ust@yahoo.com</A>>:<BR>>> Basically agreed. When people complain about a price being too high or too<BR>>> low (in an uncoerced setting*), they demonstrate a misunderstanding about<BR>>> how prices work. None of these claims hold up under scientific scrutiny.<BR>> <BR>>
OTOH, money need not be supplied "for a price", let alone after having<BR>> been produced out of thin air by some private entity.<BR><BR>Money is a value token. Creating it without value debased it thus indirectly taxing all holders of money. <BR>The word 'supplied' may hide the fact that new tokens of value are being created out of thin air with no new value <BR>to back them up. Nor is this theoretical. From 1910 to today the US dollar lost over 95% of its purchasing value<BR>largely through inflation of the money supply. Since the current economic crisis began the US has apparently<BR>effectively doubled the money supply. It is not hitting the markets in mega inflation because so much is tied up in interest bearing (!?) bank reserves with the Fed. But I would look for at least double digit inflation not too many <BR>years from now. <BR><BR>- s</DIV></DIV></div><br>
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