Puzzled
Sir: I am puzzled at the outrage expressed by Mr Nicholas Davenport in his City report (13 November): 'It is really fantastic that in a year of rising unemployment we pay out £750 million extra to moneylenders!' The interest rates he quotes are barely above the inflation rate so the moneylenders would make little profit if there were no taxes to pay. With taxes they stand to take a big loss.
Society needs more real moneylenders not fewer, and it will not get them in sufficient quantity until it is willing to pay real positive net interest after taxes. A banking system that can loan the public several times the money it has loaned its government is not a real moneylender but a mechanism for spurious creation of excess paper money without a corresponding excess of goods and services. As long as such banking procedures are used to finance government debt rather than taxes or real moneylenders, so long will we have paper money buying less and less. Robert Hobart Box 43844, Nairobi
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