To see the role of interest correctly, you should look at the macro picture.
When talking about a Nation's balance of payments, it's important to see
that not everyone can have an export surplus. It's a zero-sum game.
Interest paid is similar to this. Dollars demand dollars paid in interest.
BTC will demand BTC paid in interest. Hence it is rational to think of
Dollars, or Yen, in much the same way as we think of exports of imports
from the USA or Japan. You can't pay dollar interest in Yen.
So, suppose Alice mines Bitcoin, and Bob mines an altcoin called Scamcoin.
Bob borrows 100BTC from Alice for a year at 10% interest. Bob can never
pay his debt to Alice in full without some form of debt cancellation.
So, set aside the mechanics of the deal, and ask who has control here?
Who has the leverage and how did that happen?
And if Alice once accepts payment in Scamcoin, is her situation any different
to someone accepting Central Bank fiat money?
Topic: What is Usury? "De Florijn" project and interest-free credit. (Read 1149 times)
Interest-free loans is fake. When the market falls in order to heat it use this mechanism. But at this moment in the country there is deflation and the Bank loses nothing. As soon as the economy grows interest-free loan is impossible.
Interest is essentially the price of trust and liquidity (which is very similar !).
Of course trust is a factor (people with lower credit rating pay higher interest), but the primary factor is opportunity cost.
If I have money, I can choose to either invest it or loan it. If I loan it at no interest, then I have lost any money I could have made by investing it. If you want me to loan you money that I could otherwise invest, it is going to cost you.
True, which is why I don't understand why some people have a hard time accepting interests. Every action while opening options, also limit you by closing of other paths not chosen. In addition to losing the option to use the money you have lent, prices rise, if you just loan out money without interest, by the time it is returned, it would have already lost some value. In short, you can even say you lost money!
I'm not sure with commercial banks but maybe part of the interest is also used to reduce the damages from defaults. I mean, I heard that's the real reason loansharks charge a high interest.
The good thing these days is that people who are not eligible for loans have a bit more option to obtaining funding, depending on the nature of their enterprise.
Interest-free credit is a total nonsense.Nobody would give a loan without any interest.
This guy doesn`t know anything about economics and finance.
Is this Usury thing some other altcoin?
This guy doesn`t know anything about economics and finance.
Is this Usury thing some other altcoin?
Well to be fair, I think some people would lend money interest free. For example, I bought a car from my parents and instead of paying them they allowed me to make monthly payments with zero interest. Of course, they trust me and that's sort of the core of the issue I think, as @dinofelis said.
They're family sir. Banks deal with strangers. This is why I think there should be more focus on platforms similar to Kickstarter and Indiegogo. By spreading out the source of funding, the borrower can get a larger amount of money and lenders don't take much risk because they only give a small amount of money. It's this moments that I wish I can as 50 cents from each working person on the planet.
To bad we can't have microtransactions now. I while ago I was thinking of sending a Youtuber a dollar but when I checked the total cost in the exchange, the fee was around 87 cents. Ridiculous. I was late to bitcoins, I've heard it was a good platform for donations in the past.
Of course, I was just pointing out that, "nobody would give a loan without interest" is false. It has to do with trust.
I think all of these new platforms will be good. The more choices the better.
Yes, there should be options for people that would normally not be able to obtain loans from banks. I believe someone has already started some sort of crowdfunding for farmers. It's not exactly interest free but I believe you can buy "shares" for as low as 40 cents. This is given to the farmers for seed and I believe machinery rental. Funders then get a small interest when the rice is harvested and sold.
EDIT: Oh I looked around and finally found an article about them. http://inc-asean.com/editor-picks/start-helping-filipino-farmers-one-crowdfunded-farm-time/
I believe I first heard about it a few years ago so I didn't remember the exact details.
His explanation of usury is very broad and is somehow a pain in the head. For common people it would be a waste of time reading since it takes a while decrypting the message that he wants to relay. For me usury is simple it is using other people to achieve something without giving a value to the efforts of the people who helped you achieved your goal. Thus usury is done out of greediness.
Every loaning on % has one mathematical problem. You are lending 100% of something and you expect the 105% of the same. Where are you going to take this 5% from? Many would say that they will take that money from the market, or from the estimated market growth. That kind of behaviour is called an exteriorization of the costs. The cost of transaction between the two individuals are being financed by the society and its need of growth to make the loan even physicly possible without causing the deflation.
You can not have a healthy economy where everybody else but me must pay the costs. Sooner or later such a kicking away the ball must end bad as there will be noone else to exploit. Thats the moment when the empires, by the way always builded on the usury, fail.
You can not have a healthy economy where everybody else but me must pay the costs. Sooner or later such a kicking away the ball must end bad as there will be noone else to exploit. Thats the moment when the empires, by the way always builded on the usury, fail.
I believe much of the national "debt" is simply just money supply and it was never intended to be paid off. In fact, as you said, it can't be. Why do they always talk about the national debt as if it is something that we owe? If the national debt was completely paid off (which is physically impossible) it would wipe out all of the currency supply.
I do not know if thats what its called. I think you complicate the matters too much. Some of the numbers must be ficticious for the mathematics to be right. If those are those ficticious numbers, ok let them be. To be honest I do not know what numbers are real and what are not.
In the Bible you have described a monetary system for the Israelites that was to be different than the current Babylonian system. It involved clearing up the debt as a clean slate every 7 years. That was so because people back then new that Babylonian system is not sustainable as it was based on ficticious math (babylonian mysteries) that was done by usury.
I think some of the debt abolishment from time to time would be great, for the start. Its ficticious either way, so what difference does it make?
Interest is essentially the price of trust and liquidity (which is very similar !).
Of course trust is a factor (people with lower credit rating pay higher interest), but the primary factor is opportunity cost.
If I have money, I can choose to either invest it or loan it. If I loan it at no interest, then I have lost any money I could have made by investing it. If you want me to loan you money that I could otherwise invest, it is going to cost you.
Every loaning on % has one mathematical problem. You are lending 100% of something and you expect the 105% of the same. Where are you going to take this 5% from? Many would say that they will take that money from the market, or from the estimated market growth. That kind of behaviour is called an exteriorization of the costs. The cost of transaction between the two individuals are being financed by the society and its need of growth to make the loan even physicly possible without causing the deflation.
You can not have a healthy economy where everybody else but me must pay the costs. Sooner or later such a kicking away the ball must end bad as there will be noone else to exploit. Thats the moment when the empires, by the way always builded on the usury, fail.
You can not have a healthy economy where everybody else but me must pay the costs. Sooner or later such a kicking away the ball must end bad as there will be noone else to exploit. Thats the moment when the empires, by the way always builded on the usury, fail.
It sounds like you're talking about the issue of debt based money. If the FED creates $100 from nothing, then loans it to the US government at 5% interest or whatever, then a debt has been created on the books. The government then has to pay back $100 plus $5 interest, so where does the additional $5 come from when? Well, since the government doesn't have fiat money they'd need to have it created for them, but again, there would be additional interest. So yes, I agree it's a fucked up system.
I believe much of the national "debt" is simply just money supply and it was never intended to be paid off. In fact, as you said, it can't be. Why do they always talk about the national debt as if it is something that we owe? If the national debt was completely paid off (which is physically impossible) it would wipe out all of the currency supply.
Some of it was legitimately borrowed from the accumulated wealth of other governments, investors, etc., but I think printed money vs actual borrowed money are two different things with no real distinction and simply lumped together as the national debt.
If you legitimately save $10,000 and lend me $5000 at 5% per year, then that is a different idea. The additional 5% interest I pay you comes from my future productivity. It's no different than if you have a stockpile of Oranges. I can consume a few of your Oranges now without a problem, because next year I will grow a surplus from which I will pay you back.
Every loaning on % has one mathematical problem. You are lending 100% of something and you expect the 105% of the same. Where are you going to take this 5% from? Many would say that they will take that money from the market, or from the estimated market growth. That kind of behaviour is called an exteriorization of the costs. The cost of transaction between the two individuals are being financed by the society and its need of growth to make the loan even physicly possible without causing the deflation.
You can not have a healthy economy where everybody else but me must pay the costs. Sooner or later such a kicking away the ball must end bad as there will be noone else to exploit. Thats the moment when the empires, by the way always builded on the usury, fail.
You can not have a healthy economy where everybody else but me must pay the costs. Sooner or later such a kicking away the ball must end bad as there will be noone else to exploit. Thats the moment when the empires, by the way always builded on the usury, fail.
Thanks for the link, there seems to be some interesting reading there.
To answer your first question, Usury is a financial system whereby money,
debt and credit have an attached interest burden.
To answer your first question, Usury is a financial system whereby money,
debt and credit have an attached interest burden.
Well that is a slightly different definition than I'm familiar with (lending money at high rates), but probably makes more sense as at least it's more clearly defined
Some on this thread seem
shocked by the idea that money could be lent without interest. That, in
itself, is interesting, especially since many people view the current
financial system as entirely rotten, but cannot conceive any alternative.
shocked by the idea that money could be lent without interest. That, in
itself, is interesting, especially since many people view the current
financial system as entirely rotten, but cannot conceive any alternative.
True
I leave it to the reader to continue his education in economics. I'll
suggest you might arrive here: If you can control the price of credit
(interest rates) tomorrow, or in three month's time, then you are in a
position to make vast profits from bets on the trillions in derivatives
bought and sold every day in the credit markets.
suggest you might arrive here: If you can control the price of credit
(interest rates) tomorrow, or in three month's time, then you are in a
position to make vast profits from bets on the trillions in derivatives
bought and sold every day in the credit markets.
Just because you can control interest rates doesn't necessarily mean interest is the root of the problem. In my view, the banks are essentially granted a monopoly by the state. Lack of a free market in currencies seems to be the bigger issue.
I just don't see a situation where there would be zero demand to borrow and to pay for the option with interest. It seems like a reasonable option imo. If it's a free market in lending, then I also don't see any issue with it between two consenting parties. That's why lending at high rates just seems like a non-issue to me. I maybe don't prefer it, but it's certainly not immoral as people claim.
Here's another question for you: Why would anyone cancel a debt?
I'm not sure what you're asking. I guess if someone defaults on their debt?
Thanks for the link, there seems to be some interesting reading there.
To answer your first question, Usury is a financial system whereby money,
debt and credit have an attached interest burden. Some on this thread seem
shocked by the idea that money could be lent without interest. That, in
itself, is interesting, especially since many people view the current
financial system as entirely rotten, but cannot conceive any alternative.
I leave it to the reader to continue his education in economics. I'll
suggest you might arrive here: If you can control the price of credit
(interest rates) tomorrow, or in three month's time, then you are in a
position to make vast profits from bets on the trillions in derivatives
bought and sold every day in the credit markets.
Here's another question for you: Why would anyone cancel a debt?
To answer your first question, Usury is a financial system whereby money,
debt and credit have an attached interest burden. Some on this thread seem
shocked by the idea that money could be lent without interest. That, in
itself, is interesting, especially since many people view the current
financial system as entirely rotten, but cannot conceive any alternative.
I leave it to the reader to continue his education in economics. I'll
suggest you might arrive here: If you can control the price of credit
(interest rates) tomorrow, or in three month's time, then you are in a
position to make vast profits from bets on the trillions in derivatives
bought and sold every day in the credit markets.
Here's another question for you: Why would anyone cancel a debt?
Interest-free credit is a total nonsense.Nobody would give a loan without any interest.
This guy doesn`t know anything about economics and finance.
Is this Usury thing some other altcoin?
This guy doesn`t know anything about economics and finance.
Is this Usury thing some other altcoin?
Well to be fair, I think some people would lend money interest free. For example, I bought a car from my parents and instead of paying them they allowed me to make monthly payments with zero interest. Of course, they trust me and that's sort of the core of the issue I think, as @dinofelis said.
They're family sir. Banks deal with strangers. This is why I think there should be more focus on platforms similar to Kickstarter and Indiegogo. By spreading out the source of funding, the borrower can get a larger amount of money and lenders don't take much risk because they only give a small amount of money. It's this moments that I wish I can as 50 cents from each working person on the planet.
To bad we can't have microtransactions now. I while ago I was thinking of sending a Youtuber a dollar but when I checked the total cost in the exchange, the fee was around 87 cents. Ridiculous. I was late to bitcoins, I've heard it was a good platform for donations in the past.
Of course, I was just pointing out that, "nobody would give a loan without interest" is false. It has to do with trust.
I think all of these new platforms will be good. The more choices the better.
Interest-free credit is a total nonsense.Nobody would give a loan without any interest.
This guy doesn`t know anything about economics and finance.
Is this Usury thing some other altcoin?
This guy doesn`t know anything about economics and finance.
Is this Usury thing some other altcoin?
Well to be fair, I think some people would lend money interest free. For example, I bought a car from my parents and instead of paying them they allowed me to make monthly payments with zero interest. Of course, they trust me and that's sort of the core of the issue I think, as @dinofelis said.
They're family sir. Banks deal with strangers. This is why I think there should be more focus on platforms similar to Kickstarter and Indiegogo. By spreading out the source of funding, the borrower can get a larger amount of money and lenders don't take much risk because they only give a small amount of money. It's this moments that I wish I can as 50 cents from each working person on the planet.
To bad we can't have microtransactions now. I while ago I was thinking of sending a Youtuber a dollar but when I checked the total cost in the exchange, the fee was around 87 cents. Ridiculous. I was late to bitcoins, I've heard it was a good platform for donations in the past.
Interest is essentially the price of trust and liquidity (which is very similar !).
Why do I need a "loan" ? What is a loan in fact ? It is the exchange of a promise of mine against "money", which I will use to buy something ; say, a car. Now why would the car salesman not accept my promise, but accept money ? Because the car salesman has more trust in the money system than in me ; which indirectly means, that he has more trust in the issuer of the money (and in all people trusting this), than in me directly. Note that the car salesman can perfectly accept my own promise, and doesn't need me to go getting a loan ! If I buy a car on credit directly with the car salesman, I have in fact short-circuited the lending circuit of money. But in many cases, I need money and I can't buy it with my promise directly, because my promise is trusted less than money from a bank.
When I exchange a promise (to pay back) against money, I exchange a "low value trust" asset (my promise) against a "high value trust" asset (money). The interest is the price I have to pay to the detainer of "trust" to use his trust. His trusted issuing of money has more trust (and hence liquidity - no discussions to be had, everybody accepts it) than my issuing of promises ; so me exchanging my promise for his money is what I need to pay with interest.
The free market sets this interest rate. In as much as I think that in the end, his trust is over-rated, and the car salesman will accept my promise directly (direct credit with the car salesman !), I don't take his high-interest loan. In as much as I really depend on his trusted money and nobody accepts my promises directly, I'm obliged to accept high interest.
In fact, the whole fiat system is based upon a layered system of trust like this, where money is issued on a higher layer (central bank, say) is issued against promises of higher quality down to promises issued by individuals against loans.
Why do I need a "loan" ? What is a loan in fact ? It is the exchange of a promise of mine against "money", which I will use to buy something ; say, a car. Now why would the car salesman not accept my promise, but accept money ? Because the car salesman has more trust in the money system than in me ; which indirectly means, that he has more trust in the issuer of the money (and in all people trusting this), than in me directly. Note that the car salesman can perfectly accept my own promise, and doesn't need me to go getting a loan ! If I buy a car on credit directly with the car salesman, I have in fact short-circuited the lending circuit of money. But in many cases, I need money and I can't buy it with my promise directly, because my promise is trusted less than money from a bank.
When I exchange a promise (to pay back) against money, I exchange a "low value trust" asset (my promise) against a "high value trust" asset (money). The interest is the price I have to pay to the detainer of "trust" to use his trust. His trusted issuing of money has more trust (and hence liquidity - no discussions to be had, everybody accepts it) than my issuing of promises ; so me exchanging my promise for his money is what I need to pay with interest.
The free market sets this interest rate. In as much as I think that in the end, his trust is over-rated, and the car salesman will accept my promise directly (direct credit with the car salesman !), I don't take his high-interest loan. In as much as I really depend on his trusted money and nobody accepts my promises directly, I'm obliged to accept high interest.
In fact, the whole fiat system is based upon a layered system of trust like this, where money is issued on a higher layer (central bank, say) is issued against promises of higher quality down to promises issued by individuals against loans.
I think that's a great way of stating it.
The author spoke of the theory of "time-value" and also "risk", as two reasons for interest. He says time-value is non-sense:
Quote
There is no ‘time value’ of money. It is all created by bookkeeping and the bank loses nothing. It creates the money when lending and retires it when repaid. But even when we talk about savings, there is no real ‘time value’.
Of course for banks printing money that may be true. For people with savings, afaics, he's saying the fact we're saving means we're not presently using, therefore can lend to somebody who will use.
Quote
Because why do people save? To use it later! They don’t want to use it now, otherwise they would not save! So they lose absolutely zero by not being able to use it now if they lend it out. Not using it now but later is the essence of saving! And if we are not going to use it now, why not let somebody else use it in the mean time??
What are your thoughts on that? Personally, there are many things I could do with my money. Invest it real estate, stocks or businesses, where I'd earn ROI or receive equity for example. Why would I lend it for nothing? (exceptions being those close to me)
To me his interest free credit idea is a niche. I'd like to see it be successful, but I have my doubts of it becoming very large. It would be nice to see, as I think there would be greater accountability when dealing with already established relationships vs large faceless banks.
Are you familiar with Ripple? I think the Ripple network sort of technologically represents this network of trust idea, although I don't understand Ripple that well. I know that you can extend certain amounts of trust (credit) to people, who in turn trust others.
Interest-free credit is a total nonsense.Nobody would give a loan without any interest.
This guy doesn`t know anything about economics and finance.
Is this Usury thing some other altcoin?
This guy doesn`t know anything about economics and finance.
Is this Usury thing some other altcoin?
Well to be fair, I think some people would lend money interest free. For example, I bought a car from my parents and instead of paying them they allowed me to make monthly payments with zero interest. Of course, they trust me and that's sort of the core of the issue I think, as @dinofelis said.
but that is different, with your parents it's not only abotu trust but favor or gift, there is no same thing when you deal with a stranger, i also give money to my family and i don't want any interests for that of course, it's my family, would be terrible to demand interests from that, in some case i don't even want the money back
Interest-free credit is a total nonsense.Nobody would give a loan without any interest.
This guy doesn`t know anything about economics and finance.
Is this Usury thing some other altcoin?
This guy doesn`t know anything about economics and finance.
Is this Usury thing some other altcoin?
Well to be fair, I think some people would lend money interest free. For example, I bought a car from my parents and instead of paying them they allowed me to make monthly payments with zero interest. Of course, they trust me and that's sort of the core of the issue I think, as @dinofelis said.
Interest-free credit will work for banks / financial institutions when depositors stop expecting interest on their deposits. 
This will break the business model of banks and won't happen anytime in the real world. When there are people who are ready to pay interest for loans and there are people who are ready to give loans for interest, economists shouldn't be preaching to them.
This will break the business model of banks and won't happen anytime in the real world. When there are people who are ready to pay interest for loans and there are people who are ready to give loans for interest, economists shouldn't be preaching to them.
In a sense, "charging interest" is one of the core contributors to the debt problems of this world. The problem is not just the interest, but the exorbitant interest being charged on money you do not have. < Fractional-reserve banking is the practice whereby a bank accepts deposits, makes loans or investments, and holds reserves equal to a fraction of its deposit liabilities. Reserves are held as currency in the bank, or as balances in the bank's accounts at the central bank. >
This practice should be stopped and high interest rates and hidden administration fees should be addressed by our governments, but they prefer to look the other way and when the shit hits the fan, they bail out these banks with our tax money. ^grrrrrrrr^
This practice should be stopped and high interest rates and hidden administration fees should be addressed by our governments, but they prefer to look the other way and when the shit hits the fan, they bail out these banks with our tax money. ^grrrrrrrr^
Interest-free credit is a total nonsense.Nobody would give a loan without any interest.
This guy doesn`t know anything about economics and finance.
Is this Usury thing some other altcoin?
Some banks have now provided a service to their customers, which enable the client to take a certain amount of money for six months, for example, with a return every month in equal parts. Maybe it was this moment? This guy doesn`t know anything about economics and finance.
Is this Usury thing some other altcoin?
Interest-free credit is a total nonsense.Nobody would give a loan without any interest.
This guy doesn`t know anything about economics and finance.
Is this Usury thing some other altcoin?
This guy doesn`t know anything about economics and finance.
Is this Usury thing some other altcoin?
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