Topic: What is Usury? "De Florijn" project and interest-free credit. (Read 1143 times)

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.

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.

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.

Interest is essentially the price of trust and liquidity (which is very similar !).

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.

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?

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.

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 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.

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’.

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??

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 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?

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?

The idea that ‘the lender can’t use the money when he lends’ is the classical argument to rationalize Usury. But the bank doesn’t lend anything. It’s all credit by bookkeeping.

The ‘time value of money’ is the notion that holding money today is worth more than tomorrow. Between today and tomorrow there will be inflation and the missed opportunity of investing it.

It is at the core of modern theory of finance. It is the rationale for Usury, it can be heard each and every time when people defend it. It is the defining belief that creates acceptance for interest on loans of money.

Because Usury is supposed to be the compensation for the ‘lost’ ‘time value’ to the lender.

People will also point at risk, but there is no risk, there is collateral. Only bogus credit card debt and consumer loans are without collateral and the interest on these kinds of loans can be quite astonishing. But for serious credit, business loans, mortgages, there is collateral and there is no risk to the lender.

The fact that the time value idea still holds so much sway is quite astonishing, after 12 years of Truth Movement and mass exposure of fractional reserve banking.

Because the fact is: nowadays the creditors are usually banks and banks don’t lend anything. They create credit, by bookkeeping. That is what fractional reserve banking is: double-entry bookkeeping, in which debit and credit are implicit and automatic.

It is one thing with simply uninformed people, including most economists who are remarkable mainly for their ignorance in monetary matters. It is borderline bizarre with the Austrians, who are famous for their analysis of fractional reserve banking. But how can one on the one hand defend the ‘time value’ hoax and on the other hand explain that the banks create money and don’t have reserves for what they purportedly lend? It creates quite a cognitive dissonance.

The banks don’t lend and that’s why the ‘time value’ ‘argument’ is a total hoax. Utterly irrelevant. The bank wins nothing by creating money (other than the opportunity to extort the ‘borrower’, who doesn’t realize he isn’t borrowing anything real) and it gains nothing when the money is repaid: the bank takes it out of circulation and the money just ceases to exist as a concept. There is nothing in the books anymore.

The Austrians, and indeed also many paper money reformers, then go on to claim the problem is that the bank creates money! And that we will all feel much relieved when these are indeed savings when we borrow from the bank. Then our sense of ‘justice’ is satisfied.

This hoax is known as ‘full reserve banking‘ and nowadays there is a growing and unisono choir for ‘reform’ of banking based on this idea. The Financial Times’ Martin Wolf wants it. The Frankfurter Algemeine splashes a front page with this great idea. Dutch television is soon airing a major program defaming fractional reserve banking and hallowing our right to pay interest to ‘savers’ (the rich), instead of bookkeepers. The IMF is writing positively about it.

We don’t realize that this means that we will continue paying the same amount of money. Why aren’t we asking ourselves the question ‘but if the bank creates the money by bookkeeping, why am I paying interest?’

That is of course the rational response to the awareness that money is created at close to zero cost.

But even if money was printed debt-free or if we use Gold to back all the money, usury would still be both wrong and unnecessary. 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??

And even when we think of inflation we are wrong: most ‘inflation’ in the sense of rising prices since the war was caused by ever higher interest charges passed on through prices. It was not caused by money printing, the extra money was printed to pay off the usury. Interest bearing money cannot exist without eternally rising prices (or eternal deflation when the money supply cannot grow, as is the case with Gold). Interest-free money, on the other hand, will see stable prices if managed correctly.

So there is no ‘time value of money’. The rich are just insanely addicted to money and they want more. So they have spin doctors and useful idiots (‘economists’) think up excuses to explain it’s all so necessary and pay them a few hundred grand per year to have it look good.

Inconvenienced millionaires
Why do people have difficulty to see the iniquity of Usury? Someone recently said it is because people don’t see themselves as poor, but as ‘temporarily inconvenienced millionaires’. We are all raised to work hard and expect ‘success’. And ‘success’ is making a bundle and then retiring, having other inconvenienced millionaires sweat away to service the loans we will be giving them through our mutual funds.

But: working hard has little to do with it. There would be many millionaires if working hard was leading to wealth. It’s true that genius expresses itself through a combination of talent and hard work, but most of us are just beta males and the opulent want us to lick their boots, not to join their ranks.

We are raised to be ‘responsible’ adults and are told frugality and saving are a real part of that. We are learned the magic of compound interest at school. Nobody is telling us some other guys have picked up this trick a few centuries ago and have a bit of a head start, ripping society apart with the trillions that compound interest is now making them yearly. We are not told that paying compound interest to the rich is what is keeping us poor. No, morons like Peter Schiff now say we need to save more and we need incentives for that: higher interest rates. Peter Schiff is not explaining how people, who already lose more than half of their income to usury (partly passed on in prices and taxes), are going to save more when they have to pay even more interest to the rich, while they are already living from pay check to pay check, as most Americans are today. Even a good man like Paul Craig Roberts falls for this. It’s our economic illiteracy, not understanding money and Usury.

Because the simple fact is: by saying ‘I wouldn’t lend without interest’, we relegate ourselves and our brethren to interest slavery. Because we don’t lend, we borrow. By not lending to our brethren, they will not lend to us. We will have to go to the rich and to the banks. Why was the middle class sending their children to the bank for a mortgage when they had the assets to set them up with a good start in life with an interest-free mortgage? Why are people worrying about their savings today, while at the same time their children face foreclosure? Why are these savings not sunk into paying off the banks to save the wider family from the losses to usury?

We talk about ‘corruption’ in finance but we don’t see that finance itself is corrupt.

By saying: I want interest, we say it’s alright that we pay 300k interest over a 200k mortgage over 30 years. We say: it’s grand that I lose up to 40% of my income to usury passed on in prices even if I have zero debts. We say: how splendid the Government is losing up to 450 billion per year on servicing the National Debt. How great that there is income tax to pay off this money to the ueber-wealthy. We say: how magnificent that the ultra poor nations lose up to ten times more to usury on their foreign debts than they receive in development aid. We say: ah, just don’t get into debt, even when there would be no money if there was no debt. We say: yes, let’s destroy all economies with insane austerity, because the interest on this freshly printed money must be paid off.

Because, hey, I wouldn’t lend without interest!

Conclusion
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’.

Meanwhile, when we say ‘I wouldn’t lend without interest’ we are just parroting the line of the rich. We don’t realize that we are the ones paying and that we should be saying: “hey, I’m an interest-slave, how do we bust this ‘time value’ hoax, I need interest-free credit, I don’t want to be a slave.”

But for that we have to rid ourselves of the slaver in our selves. We must abandon the American Dream. That nightmare of striking it rich and putting our own boot on the face of our brother.

Credit can be interest-free if it’s mutual. I give you credit, if you give me some. We don’t even have to give up any real money: we can have a credit facility keep the books at cost price. Credit and Debit are just two sides of the same coin in double-entry bookkeeping.

Yes, it requires a little new thinking, a little shedding of wrong beliefs. But the poorest 80% (us) are paying up to 10 trillion in usury per year globally to the richest 10% and most of this money actually ends up with the 1%. That 1% now owns 43% of all assets in the world and the poorest 80% (us) own only maybe 10% if we’re lucky. Usury is what is causing this. Even if we have zero debts, 40% of our disposable income is lost to usury passed on in prices, so it has nothing to do with ‘personal responsibility’. It is the System that we prop up that is keeping us down.

It is when we start to see this, when we start to see what exactly is making these ghouls in London and Wall Street so incredibly wealthy, that we can begin to mend the destruction that the Money Power has been wreaking for many centuries now.

Usury is the practice of charging interest at "unreasonably high rates" for loaning money.

The Muslim religion also considers usury a sin, it's part of their Shari'a law...interest is illegal. The question is what does one consider "unreasonably high rates"...it's so subjective.

In the world the act of charging interest does keep people from building wealth. But who is responsible for that - is in the people lending the money or the people that are seeking loans to pay for things. I believe it's the latter, each of is responsible to ourselves to manage our money (and our expenses and income) responsibly. There are consequences to every decision. Each of is can be more wealthy if we don't borrow money, the trade off is that we have to be disciplined to save the money and go without the thing we want to buy until we've saved the money.

Usury is not the root of the worlds problems. Interest (even at fair rates) is a contributor to some problems. E.g., without interest (and therefore borrowing) we'd all have less stuff but we'd all be a bit more wealthy. Also, the muslim community would have one less thing to look down upon the Western community for.