Wednesday, February 18, 2009

The State of the Indonesian "Union" is Better

I don't dispute that credit unions are the superior form of "thrift" institution. I have my money in a credit union.

My exception is with the Capitalist system which assumes that money will be worth less (eventually, and getting closer all the time, worthless).

If such a Moslem law were passed worldwide, the banning of all loan interest as usury, there would be no need for unions to pay out "dividends" and charge "interest", that is only slightly less usurious and inflationary than Bank loans. The lender, the saver, is the winner, and the borrower the loser in such transactions. But does the dividend really cover the inflationary spiral of the dysfunctional Capitalist system?

I like the Moslem model where an equity union (my term) contracts with a community entity to share profits. Another way to look at it, is no interest loans with fee for services, but the latter assumes that there is no competition for funds, and the former would be more effective if whatever competition for funding that occurred were based on the equity union's ability to "invest" in successful endeavors, and not on an expected return on equity that was inflated by the assumption that money will be worth less in the future.

Besides, where will our credit unions be as it is realized that the automobile industry and home "ownership" are dead, and that in reality, almost all small businesses can't compete with Corporate Conglomerates and Capitalists who just move their money when they see that a business entity is dying or dead?

Mike Morin

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