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There's nothing wrong with interest as long as the principle doesn't create "money".
I loan you my pick-up, pay me.
I loan you fifty bucks, pay me.
Do you demand a return of 112% of your pickup?
Of course not.
Pickups do not reproduce.
Neither does money.
But usurers have been running the "natural increase" scam for millennia.
Aggregate usury (all principle and all interest) creates a debt that is greater than the sum of existing money tokens. Hence it becomes impossible for all debtors to repay their loans with interest.
A proportion will default, and lose their collateral simply because the money does not exist.
THAT is why usury is an abomination and Ezekiel 18:13 KJV says they shall surely die, their blood be on their own hands.
In 1836 John Whipple, an American lawyer, showed the impossibility of sustaining long term metallic usury:
" If 5 English pennies... had been... at 5 per cent compound interest from the beginning of the Christian era until the present time, it would amount in gold of standard fineness to 32,366,648,157 spheres of gold each eight thousand miles in diameter, or as large as the earth."
[Translation - impossible to pay]
In any finite money token system, usury is impossible to pay.
The exponential equation for compound interest insures that aggregate usury will create a debt that is impossible to be repaid by all debtors.
In short, usury, charging a fee, in money, for the use / loan of money is (a) mathematically unsound, (b) denounced by all religions, and (c) denounced by philosophers.
Don't misunderstand me. I studied engineering economic analysis and was quite adept at calculating time value of money problems. However, no instructor nor text book noted that it was a mathematical impossibility for long term usury to exist.
Puzzling, isn't it?
The apologists for usurers (aka Economists) can't admit that fact, without exposing their complicity in the scam.
Adam Smith, in his book, "The Wealth of Nations", was a vile butt kissing usurer fan boy.
I've lost the original URL but here's an excerpt:
"Adam Smith's 1776 WEALTH OF NATIONS, capitalism's "bible," put aside these earlier rationales, and justified usury in economic terms:
" The interest or the use of money is the compensation which the borrower pays to the lender, for the profit which he has an opportunity of making by the use of the money. Part of that profit naturally belongs to the borrower who runs the risk and takes the trouble of employing it; and part to the lender, who affords him the opportunity of making this profit.
"This is how interest is popularly viewed today."
" But Smith overlooked that the lender gets his profit even when the enterprise loses..."
[Note: As long as a debt is guaranteed by the debtor's collateral, the usurer has little risk. And if the usurer is loaning other people's money, there is nothing of his own at risk.]
Or how about a "Poker Parable"
Imagine a Friday night poker game, where the host gives each player 100 chips as he arrives, with the requirement to pay him 101 chips at the end of the gaming - or forfeit something of value in case of default. As the games come to an end, the "winners" can easily pay their 101 chips and depart, but the losers can't even repay the original 100, let alone 101 chips, and are therefore deprived of their valuables pledged to the host. Since the host controls the finite sum of tokens, it is a certainty that a some players will lose their chips and property. THAT IS THE EVIL OF USURY. The usurer wins either way, because the "game" is rigged. In any finite money token system, the aggregate (combined) usury requires that an INCREASE in money tokens be created else a proportion will default not because they're bad, incompetent, or pitiful, but because usury is impossible to pay in a finite money token system.
When a business goes bankrupt or a laborer defaults, we are led to assume that the defaulter made some mistake. They did - but it was contracting with usurers, not their productive ability, that sealed their fate.
Usury (pronounced /ˈjuːʒəri/, comes from the Medieval Latinusuria, "interest" or "excessive interest", from the Latin usura "interest") originally meant the charging of interest on loans.
"Usury is defined as the act or practice of lending money for interest above the legal or socially acceptable rate. The term seems archaic and mostly irrelevant in the deregulated, free-market world of payday loans. And it is even harder to fathom that for most of its history, the word referred to the practice of charging any interest in excess of the principal amount of a loan.
Historians trace the practice of usury back approximately 3,500 years, and for the vast majority of that time, it has been repeatedly condemned, scorned and prohibited for moral, ethical, religious and economic reasons. Since well before biblical times, lending money for profit has been essentially forbidden by the tenets of Christianity, Judaism, Islam, Hinduism and Buddhism. "
- - -
In 1543, the Estates General of the Habsburg Netherlands – while still Catholic, but under Protestant(Lutheran, Calvinist) influences, enacted a statute to legitimize interest payments up to 12%: anything above that was considered to be usury.
In 1545, just two years later, Henry VIII had his Parliament enact a similar statute to legitimize interest up to 10%: similarly, anything above that was considered to be usury.
In 1552, Parliament, at the behest of the government of Henry's son Edward VI, revoked this statute (even though this government was Protestant).
But in 1571, Queen Elizabeth I had Parliament restore her father's statute in full.
The interest rate ceilings were subsequently lowered:
to 8% in 1623;
to 6% in 1660;
and to 5% in 1711
staying at that rate until the abolition of usury laws in 1854
While other Protestant countries legalized interest, the usury ban continued to be enforced in most other Catholic countries up to the French Revolution.
"The Aristotelian view of money as a "barren" means of exchange was developed by Aquinas and not liberalised for centuries. The Roman Catholic Church opposed usury, as did Luther and other Protestant reformers, with the exception of Calvin.
"Civil law broke away from canon law on this issue in England in 1571 and moderate interest could be charged."
[Isn't that interesting? For 1,571 years, usury was evil. Suddenly secular law said it wasn't.]
"....In the period between the two World Wars, the old ban on usury, officially lifted only in 1918..."
For the Roman Catholic Church, usury was banned for 1,918 years.
-------
http://www.monetary.org/usurytalk (broken link)
"Aristotle (384-322 BC) Formulated the Classical View against usury. Aristotle understood that money is sterile; it doesn't beget more money the way cows beget more cows. He knew that "Money exists not by nature but by law":
" The most hated sort (of wealth getting) and with the greatest reason, is usury, which makes a gain out of money itself and not from the natural object of it. For money was intended to be used in exchange but not to increase at interest. And this term interest (tokos), which means the birth of money from money is applied to the breeding of money because the offspring resembles the parent. Wherefore of all modes of getting wealth, this is the most unnatural." (1258b, POLITICS)
" ...those who ply sordid trades, pimps and all such people, and those who lend small sums at high rates. For all these take more than they ought, and from the wrong sources. What is common to them is evidently a sordid love of gain..." (1122a, ETHICS)
[Note: I find myself in agreement with Aristotle, on the nature of money being a dead thing, not capable of "natural increase". And it is fitting that he lumps usurers with pimps and other sordid scoundrels. The image of the bank president in his pimp-mobile is quite fitting.]
" St. Antoninus, the Archbishop of Florence (at his time — 1440 — the banking capital of Europe) remarks how usury was a mortal sin of an especially odious kind.
"...usury ever breaks and consumes the bones of the poor, day and night, on feasts and feriae, sleeping or waking it works and never ceases."
"the Tabula exemplorum, a thirteenth-century manuscript in the Bibliothèque nationale of Paris, attests: "Every man stops working on holidays, but the oxen of usury (boves usurarii) work unceasingly and thus offend God and all the saints; and since usury is an endless sin, it should in like manner be endlessly punished."
"...the vice of usury, unlike many other sins, tends to last into old age and entangles the sinner up to the hour of his death principally because usury is a peculiarly difficult sin to repent; for its forgiveness demands restitution of the profits, an act which seems too hard to a prosperous usurer."
[NOTE: Repentance requires restitution.]
---
I have omitted anti-usury references from the Koran, because it is a well known fact that all Islamic nations categorically forbid usury. Suffice to say, the Muslims are not paranoid when they fear attacks by the Usurer dominated "Fee World".
Isn't it obvious that it is real? The 5 million+ unemployed are real, the bankrupt companies are real, the empty shopping malls are real. The huge boulder rolling down the side of the mountain, picks up speed with every lost job, as well as every company that goes under because less people have money to spend. Realistically, there is NOTHING to stop it. Sure, Obama will place a pot hole or 2 in the way to slow it, but the WALL of PERMANENT JOBS, is absent, and that is the only thing that will stop the boulder that is bearing down upon our frail bodies.
Last edited by KRAMERCAT; 02-26-2009 at 08:50 PM..
Still don't comprehend why usury is impossible to pay in a finite money system?
For example, if "everybody" invested just 10% of their money, within one time unit of usury, the resulting debt would be impossible to discharge.
Let S = whole sum of money, and
0.1 S = 10% invested, at usury, and
at 10% simple interest per time unit,
computes to:
1.1 x (0.1 S) = 0.11 S
BUT when you add up the numbers, there's a problem.
0.9 S + 0.11 S = 1.01 S
To pay the usury, the money supply (S) would have to grow 1%. If the supply is static, all investors will not be paid. (Or some debtors will default)
This problem is compounded when the money token is borrowed into existence at usury. (That's what the USA has) Each unit created imposes an obligation for more money, which, in turn, can only be created by greater debt. Ergo, debt-credit money tokens are catastrophic tools that destroy productive societies for the benefit of parasites and predators.
In any finite money token system, the aggregate (combined) usury requires that an INCREASE in money tokens be created else a proportion will default not because they're bad, incompetent, or pitiful, but because usury is impossible to pay in a finite money token system..
Where the Government issues gold-backed currency, the increase or decrease of units issued automatically adjusts the value of Gold.
Because nothing of market value (Gold) backs Federal Reserve Debt Instruments, the Federal Reserve Notes (FRN's) result an infinity in a finite world.
The drafters of the Constitution understood this.
If Jim accumulates gold-backed certificates and loans some to John with any percent interest, the payback of the principle and the interest does not require the addition of gold to the Government's reserve to cover the interest - rather, the value of Gold is changed.
Where the Government issues gold-backed currency, the increase or decrease of units issued automatically adjusts the value of Gold.
Because nothing of market value (Gold) backs Federal Reserve Debt Instruments, the Federal Reserve Notes (FRN's) result an infinity in a finite world.
The drafters of the Constitution understood this.
If Jim accumulates gold-backed certificates and loans some to John with any percent interest, the payback of the principle and the interest does not require the addition of gold to the Government's reserve to cover the interest - rather, the value of Gold is changed.
You may be unpleasantly surprised that the law disagrees with you.
Read the Coinage Act of 1792. PLEASE.
The unit dollar is a silver coin with no less than .77 ounce (troy) of pure silver.
A one ounce gold coin is equivalent to 20 Unit dollars (silver).
References:
"Dollars, or units; each to be of the value of a Spanish milled as the same is now current, and to contain three hundred and seventy-one grains and four-sixteenths parts of a grain of pure, or four hundred and sixteen grains of standard, silver."
"Eagles—each to be of the value of ten dollars or units, and to contain two hundred and forty-seven grains and four eighths of a grain of pure, or two hundred and seventy grains of standard gold."
--- Sec. 9, Coinage Act of 1792, April 2, 1792
($10 Eagle had 1/2 troy ounce gold)
According to Title 31 of the U.S. code, a silver dollar complies with the original Coinage Act.
Title 31 USC Sec. 5112. Denominations, specifications, and design of coins
(e)(1) ...weight 31.103 grams;
(e)(4) have inscriptions ... 1 Oz. Fine Silver ... One Dollar
(Troy ounce = 480 grains or 31.103 grams.)
Note: Millesimal fineness is a system of denoting the purity of silver. "Fine Silver" is .999, which is a higher purity than specified in the original law. However, .900 is equivalent to "Coin silver" in the USA, also known as one nine fine. That makes the 1 ounce coin in harmony with 416 grains of "standard silver".
(416/480 = .866666; or rounded up to .9)
The devil is in the details...
In contrast, 'dollar bills' are not lawful money, nor were they ever 'backed' by gold.
TITLE 12, UNITED STATES CODE, CHAPTER 3, SUBCHAPTER XII,sec. 411. Issuance to reserve banks; nature of obligation; redemption
"Federal reserve notes, to be issued at the discretion of the Board of Governors of the Federal Reserve System for the purpose of making advances to Federal reserve banks through the Federal reserve agents as hereinafter set forth and for no other purpose, are authorized. The said notes shall be OBLIGATIONS of the United States and shall be receivable by all national and member banks and Federal reserve banks and for all taxes, customs, and other public dues. They shall be redeemed in LAWFUL MONEY on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve bank."
FRNs are obligations of the U.S. government to pay lawful money on demand.
LAWFUL MONEY - "The terms 'lawful money' and 'lawful money of the United States' shall be construed to mean gold or silver coin of the United States..."
Title 12 United States Code, Sec. 152.
Federal Reserve Notes are issued under the authority of Art 1 Sec 8 power to borrow on the credit of the United States.
Article 1, Section 8. U.S. Constitution.
The Congress shall have Power ...To borrow Money on the credit of the United States;
Contrary to popular belief, FRNs were never 'backed' by anything. It was lie from DAY ONE.
In American law, real money is defined as precious metal coin.
Money is defined as either real money OR certificates of deposit for real money (receipt).
Notes are defined as promises to pay real money IN THE FUTURE. A note is NEVER MONEY.
The Congress repudiated their promise to redeem their notes in 1933.
They're still debt (minus value) thus they're not fiat.
You may be unpleasantly surprised that the law disagrees with you.
Read the Coinage Act of 1792. PLEASE.
The unit dollar is a silver coin with no less than .77 ounce (troy) of pure silver.
A one ounce gold coin is equivalent to 20 Unit dollars (silver).
References:
"Dollars, or units; each to be of the value of a Spanish milled as the same is now current, and to contain three hundred and seventy-one grains and four-sixteenths parts of a grain of pure, or four hundred and sixteen grains of standard, silver."
"Eagles—each to be of the value of ten dollars or units, and to contain two hundred and forty-seven grains and four eighths of a grain of pure, or two hundred and seventy grains of standard gold."
--- Sec. 9, Coinage Act of 1792, April 2, 1792
($10 Eagle had 1/2 troy ounce gold)
According to Title 31 of the U.S. code, a silver dollar complies with the original Coinage Act.
Title 31 USC Sec. 5112. Denominations, specifications, and design of coins
(e)(1) ...weight 31.103 grams;
(e)(4) have inscriptions ... 1 Oz. Fine Silver ... One Dollar
(Troy ounce = 480 grains or 31.103 grams.)
Note: Millesimal fineness is a system of denoting the purity of silver. "Fine Silver" is .999, which is a higher purity than specified in the original law. However, .900 is equivalent to "Coin silver" in the USA, also known as one nine fine. That makes the 1 ounce coin in harmony with 416 grains of "standard silver".
(416/480 = .866666; or rounded up to .9)
The devil is in the details...
In contrast, 'dollar bills' are not lawful money, nor were they ever 'backed' by gold.
TITLE 12, UNITED STATES CODE, CHAPTER 3, SUBCHAPTER XII,sec. 411. Issuance to reserve banks; nature of obligation; redemption
"Federal reserve notes, to be issued at the discretion of the Board of Governors of the Federal Reserve System for the purpose of making advances to Federal reserve banks through the Federal reserve agents as hereinafter set forth and for no other purpose, are authorized. The said notes shall be OBLIGATIONS of the United States and shall be receivable by all national and member banks and Federal reserve banks and for all taxes, customs, and other public dues. They shall be redeemed in LAWFUL MONEY on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve bank."
FRNs are obligations of the U.S. government to pay lawful money on demand.
LAWFUL MONEY - "The terms 'lawful money' and 'lawful money of the United States' shall be construed to mean gold or silver coin of the United States..."
Title 12 United States Code, Sec. 152.
Federal Reserve Notes are issued under the authority of Art 1 Sec 8 power to borrow on the credit of the United States.
Article 1, Section 8. U.S. Constitution.
The Congress shall have Power ...To borrow Money on the credit of the United States;
Contrary to popular belief, FRNs were never 'backed' by anything. It was lie from DAY ONE.
In American law, real money is defined as precious metal coin.
Money is defined as either real money OR certificates of deposit for real money (receipt).
Notes are defined as promises to pay real money IN THE FUTURE. A note is NEVER MONEY.
The Congress repudiated their promise to redeem their notes in 1933.
They're still debt (minus value) thus they're not fiat.
There is LAW. And, there is COLOR OF LAW.
Quit mixing the two, or you will continue to exhibit COLOR OF THOUGHT.
The Constitution (LAW OF THE LAND) does not have, nor has it ever provided for, the power of any Government body to define or stipulate the VALUE of Gold or Silver.
It's called the Free Market.
Nixon nixed the law. Why do you suppose they called him Nixon?
"For Marshall, the idea that an unconstitutional act of legislature could "bind the courts and oblige them to give it effect" was "an absurdity too gross to be insisted on." Thus, Marshall concluded that congressional legislation contrary to the federal Constitution is null and void and cannot be enforced by a court of law." Marbury v. Madison
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USURY tidbits
