Quote from: myrkul on May 17, 2013, 02:36:55 PM

Quote from: crumbcake on May 17, 2013, 12:33:46 PM

The borrower won't have 21.21 coins, no matter what he does -- only 21 coins exist. This problem is trivial in fiat -- print moar!

Please read this again:

Quote from: myrkul on May 17, 2013, 05:31:45 AM

Put simply, Moneylenders do not just hoard all the money that they get back. Yes, it's entirely possible for someone to borrow BTC20MM and end up owing BTC36MM. This does not mean that they will be unable to pay it, necessarily, just that there will have to be at least BTC15MM that goes through his hands (and back to the moneylender) twice. While he's paying his tremendous debt, the economy is chugging right along, and he's providing value to that economy in order to get the BTC that he owes.

You can have the money going through your hands over and over (you get to hold the coinz -- you were in the gutter last night, it's my turn today

), but if you believe in laissez-faire & invisible hand & all that, and you're a competent businessman, I'll never be out of your debt. Here's how this goes:

A buggy pulled by a bony mare with her belly nearly touching the dirt road creeks to a stop next to an nondescript storefront. The storefront window is plastered with faded travel ads from the inside, a year's worth of dead flies collecting between the flyers and the dusty glass. The sign above the store, your store, reads simply "Loans."
Hat in hand & visibly uneasy, Young Man (that's ME!!!) climbs out of the buggy & ties off his horse to an empty bicycle rack. He's dressed humbly, but his bearing shows impeccable breeding, lending his dashingly handsome face an air of aristocratic refinement. He is hung like a horse. Enough said.

Here's the part where i walk into your office & we seamlessly segue from third to first person narrative:

You shoot me a distracted glance from behind a huge Rococo desk, which seems particularly grotesque in an office otherwise furnished with badly-assembled Ikea.

--Yes?
--I'm here to repay my loan.
--Hmm?
--I have the 21 coi...
--Twenty one and twenty one centicoins, you mean?
--No, I brought 21, that's all there is Embarrassed

--But you owe me 21.21?
--I thought we could work out a deal. Huh

--Deal? Yesss. I'm certain we can. I've dealt with deadbeats before. [*looks up & at Young Man*] I expect you'll be asking me for another loan? Angry

--Yes, though this one will be a rather small one, and i've proven myself a good risk Undecided

--Good risk?! Good risk you say?! You're a deadbeat with insufficient funds to repay your loan as promised, good risk! A losy risk is what you'd be if we weren't in a hypothetical scenario where you can't default or steal from me and i must maximise my profits. I'll make you a deal: I'll loan you .21 coins at a rate of 100% per year, what have you to say to that? Angry

--I'm stuck in this hypothetical scenario, i can only accept -- you hold all the chips Cry

--Thought so. I'm issuing you this loan, and putting it right back in my pocket. Expect you crawling back here again in a year's time, mooching for another loan. .42 coins that time, huh? Huh?! Now GTFO of my office!