The problem of interest-bearing debt-based currency gets a mention on BBC Radio 4

Started by sullivan, February 03, 2009, 06:50:31 PM

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sullivan

Tarek El Diwany, founder of Islamic Finance, and the Right Reverend Peter Selby, the former Bishop of Worcester, discuss if religion should interfere in market regulation. As part of this piece, both participants appear to come out strongly against debt-based currency and the control of the issuance of currency by central banks.

Mp3 here
"The real menace of our Republic is the invisible government which like a giant octopus sprawls its slimy legs over our cities, states and nation. At the head is a small group of banking houses generally referred to as \'international bankers.\' This little coterie... run our government for their own selfish ends. It operates under cover of a self-created screen, seizes our executive officers, legislative bodies, schools, courts, newspapers and every agency created for the public protection."
John F. Hylan (1868-1936) - Former Mayor of New York City

targa2

All this talk about debt based currency is a red herring.  The problem is INTEREST.  Plain and simple.  Debt is simply a promise to pay at a future date. It is a form of accounting and nothing more.

If a neighbor does a job for me and I write him out an IOU on a piece of paper, that is a debt. That debt is just the same as a piece of paper money. Paper money by legal definition is a  " note " or " bill "  , both of which are described as " evidence of debt " The only difference between the IOU and the paper note is the universality of one and the particularity of the other.

If debt based currency is a problem then the IOU to my neighbor is also a problem.  Does this make any sense ? No , of course not.

Now.....lets take an extreme example of the same debt with interest attached.  The extreme aspect will be denoted as a high rate of interest on the debt owed to my neighbor.  Lets also mark the debt as being measured in time units ( hours ). ( a form of measurement that does not fluctuate )

My neighbor is a full time carpenter and he builds me a workshop.  His accumulated time for this project is 500 man hours.
I work as accountant for a large corporation and I do a bit of book-keeping and tax return preparation as a sideline.

I agree to do the neighbors' book-keeping and tax returns until the 500 man hours is balanced out between us. I also agree that , due to the size of the debt in question I will put up my house as a collateral pledge against the debt and agree to a 30% rate of interest per annum.  In year one I do a grand total of 50 hours of book-keeping and tax prep for my neighbor. However,  I am already under water in this scenario.  I have paid down 50 hour but accumulated 150 of additional interest so I now have a compound debt of 600 hours..  If we repeat the cycle one more year we get another 50 hours paid down but accumulate 200 further hours of interest for a grand total of 750 hours of debt.  It doesn't take  a genius to figure out what is going to happen eventually in this setup.

I know that people will argue that the interest rate in this scenario is ridiculous.  Is it ???  Wasn't the rate of interest proposed to Abe Lincoln 36% when he wanted to fight the Battle of Northern Aggression.  The rate of interest is irrelevant. The only difference is the going to be the speed of foreclosure. As a matter of fact, a lower rate of interest across the board in an international system is an even more insidious enemy ,because it makes it harder to detect the real problem,

Here is another clue as to the contradictions of people discussing this topic.  We always hear that " the money supply is too high " and that is the cause of inflation.  This seems to be a contradiction. How can the money supply be too great when the majority of people are short of money.  Is the money supply the problem? It could be , but that is a simplistic argument.  Maybe the problem is WHERE the money is located: ie who has it, what type of financial instrument is it locked up in and where in the international spectrum are the instruments located. The missing money in question is simply not circulating among the rank and file populace for day to day operations.  It is tied up in INTEREST BEARING or INTEREST ACCUMULATING  assets of various descriptions.  Hmmmmmmm.....interest again!!!!!!!.  Were it not for the gain via interest , there would be no motivation to have the majority of the money supply tied up in these various instruments.   The motivation to have money GROW creates a reduction in it's value by stimulating the desire to have it grow faster than it's loss of value.  It's a self generating, self defeating Darwinistic struggle.

The problem is INTEREST.  Always has been, always will be.  If I control the money supply and I lend you the only 10 dollars in existence and ask you to repay 11, you have already become my servant.

Try explaining the term " economic growth " without using the term "dollars" or any other name for a currency.  Oh sure, I already know what you are going to say. " I turn a tree, into a table ,and now it has more VALUE or it is WORTH more ", that is economic growth!   Measured by what objective ,non-fluctuating standard?  Go look up the meaning of VALUE and WORTH in an etymological dictionary.  Go ahead , I triple dog dare yah !!!  I will give you a hint.  It says nothing about money or dollars in the definition.

sullivan

Yeah, you've posted this piece before, and you are correct in stating the nature of the problem.  However, if you listened to the piece, you'll hear the word interest being mentioned several times. In my opinion, ANY discussion of the house of cards that is the financial system, and that raises awareness of the issues, is welcome, particularly when it is on one of the most listened-to radio shows in the UK.
"The real menace of our Republic is the invisible government which like a giant octopus sprawls its slimy legs over our cities, states and nation. At the head is a small group of banking houses generally referred to as \'international bankers.\' This little coterie... run our government for their own selfish ends. It operates under cover of a self-created screen, seizes our executive officers, legislative bodies, schools, courts, newspapers and every agency created for the public protection."
John F. Hylan (1868-1936) - Former Mayor of New York City

targa2

Yes...interest is always mentioned but it never the central issue in any discussion, yet it is the issue.  Writers will go on ad nauseum about the history of the Fed and debt based currency and blah blah blah trying to fill 500 pages so they can sell a book. The problem is they never spend the time they should illustrating the simplicity of the interest flaw. All this does is confuse people when the subject is not confusing at all.  People spend so long learning this stuff they feel they need to heap the whole story on everyone. This is form of self worship.....ie oooowwwwhhhhh  look at how much stuff I know.  Shut the f... up and keep it simple I say .  I'll keep repeating myself as much as I like until I hear the message about interest being spread far and wide.

If we are going to teach people the truth then lets get it right the first time.

ps I have never posted this example before . I have posted material from others which echos this sentiment but I made this example up off the top of my head as I was writing.

sullivan

If we are going to teach people, yes, let's teach them the truth. But when a heavily controlled media gets on the subject, I think we should be thankful that they are at least raising doubts about the wisdom of allowing banks to create money out of nothing. They could do what they normally do, and pretend everything is hunky-dory. Anyway, I think this piece made it clear several times that banking can exist without interest.
"The real menace of our Republic is the invisible government which like a giant octopus sprawls its slimy legs over our cities, states and nation. At the head is a small group of banking houses generally referred to as \'international bankers.\' This little coterie... run our government for their own selfish ends. It operates under cover of a self-created screen, seizes our executive officers, legislative bodies, schools, courts, newspapers and every agency created for the public protection."
John F. Hylan (1868-1936) - Former Mayor of New York City

active_indolent

Well actually theres a big different between a debt based currency and a permanent currency.

For example:
Consider a group consisting of 10 people on an island that got 100$ in cash in 10$ bills (permanent money). Let's say one of the guys get hold of all money, the other nine would then be without money but they wouldn't be in debt to anybody. Now let the one holding i the wants to be generous and share his money. Then it would be possible for all to get 10 $ dollar bill each.

In other words it's possible to evenly distribute the money among the people )or what ever distribution you want) , either it's by the rights "trickle down" method or lefts "take from the rich, give to the poor" method. In other words there's room for politics.

Now consider the same Island where there only exist 100$ in debt money. But since all assets in a debt money system has a corresponding debt, at least one of the inhabitants have to have a debt equaling 100$. Lets say one guy get hold on all the 100$ this time. That means that the other 9 has an debt together equaling 100$. Let say this guy want to share his money equal to. But if he does so the others will be able to pay there debts and there would be no more money when they amortized their debt (morte=kill in Latin). Hence in a totally debt based money system there's not a possibility to distribute the money evenly. On the contrary - bigger and bigger rift between poor (indebted) and rich (holding the asset) is required to increase the money supply. There's no idea trying to put rich people in debt since they would be able to pay it off - the only way is to indebt those already indebted with more debt (or find new debt slaves).

This makes politics totally dead in a debt based monetary system
"Throned above all, in a manner without parallel in all past, is the veiled prophet of finance, swaying all men living by a sort of magic, and delivering oracles in a language not understood of the people."

"The true equation is "democracy" = government by world financiers."
- J.R.R. Tolkien, in "The Letters of J.R.R. Tolkien"

targa2

Your argument is based on several incorrect presumptions.    Define Permanent money.  I cannot agree or disagree with your concept until you clarify what  "permanent " is  and what the permanence of the object in question has to do with debt vs money.   If you are referring to " bills " as a form of " credit " then we are merely engaged in semantics and not the substance of the debate.

I will play along with your theory as devils advocate. Lets say you are one of the Islanders with his 10 credits. You spend all you credits in the first month on the services and goods of the other 9 people. What happens now if you have nothing to offer the other Islanders of value? ( I am making an assumption here , but it is most likely there will be one no talent shlep in the group of 10) You would have to either fend for yourself, create some new credit, or go into DEBT by borrowing some credits from the other islanders.   Well...according to every monetary theorist out there, the second and third choices are inflationary so now you have another problem.  Also...if you are going to create new credits, how do you determine what the right amount to create is? What standard do you use for the value of them in real goods and services?  What have you done to deserve new credits?

This is why gold was a good from of money.  It required labor to extract and process so it had prepaid value built in to it.

I am not saying that a credit based system is better or worse or that you are wrong or right.  I am simply trying to remove some of the MYTHOLOGY from the debate. As you can see by my assertions, just declaring your money to be a CREDIT or PERMANENT does not solve anything.  

All monetary systems are simply forms of accounting . Accounting is simply " keeping track". Money is just portable accounting.  Debt is one side of the ledger and credit is the other side.  The trick is to get the two to be equal.  Look at the Tally Stick system.  Were those debits or credits on that stick.  If you argue that they were credits , define credit.  

Another bogus " debt based " argument is that the money is created FROM NOTHING.   Wait a minute here.....how come I have to put up 2 or 3 times the collateral for this debt if it is created from nothing. The debt  is created based on my existing collateral !  In your credit system, what is it based on ?  Hmmmmmmm.....seems like you are now creating money out of nothing now. Soon we will be doing a helicopter drop !!! To be accurate in your accounting in a credit based system you would have to pledge something as collateral to be sure everyone played fair.  You could get everyone to sign a promise to accept the credits as payment for all goods and services based on a time standard.  But wait ....isn't that a pledge of DEBT.  

Anyway, the point is this.  All monetary systems including barter have their problems. Interest is the universal problem in all of them because it motivates poeple to make money from money. Money is dead and dead things should never be able to reproduce. It defies the laws of nature.

veritasvincit

There have been lenders and borrowers since the beginning of time.  Religious zealots have mis-interpreted biblical teachings throughout the ages but there is no absolute prohibition found in the Old Testament except in Exodus 22:25 & Deuteronomy 23:19-20 that forbid the taking of interest by one Jew from another. (interesting)

The main point of interest is one of justice and fairness.  It must be reasonable and proportionate to the amount of risk involved in the loan.  Some people think that interest on a loan is mathematically impossible.  Not so if you consider future production.

In simple terms:  Example:  Joe has $100 to loan to Bob at 5% interest for one year.  At the end of one year Bob has agreed to pay Joe back $105.  Joe has already earned this money through his own labour.  Bob will be using the money to grow his lawn maintenance business whereby he will earn the money to repay Joe through his own labour. Without the loan, Bob would not be able to labour without the purchase of key items for his business.   A loan is a future promise to pay against one's energy or labour and the interest is simply a fee or administrative cost for the use of the money.  This fee or interest is comparable to the fee you would pay to an accountant for his services.  Where does the money come from to pay for the services?  Through one's own future labour.

We also have to distinguish between loans used for consumption (i.e. food and other necessities of life) and loans for production whereby the borrower uses the loan to gain money or produce something as in the case of Bob.  Is it fair to charge someone interest who borrows under pressure of necessity or for some unproductive expenditure?  What is a fair interest rate to charge?   Is it fair to lend with interest to third world countries that will never be able to pay these loans back?

The main culprit in the American monetary system is not that interest is charged on loans.
1) It is the greedy men who run the system - creating too much debt that is not fairly tied to future production
2) The types of loans that are available and how people are qualified for these loans - note that credit cards are probably the worst culprit of the credit system because this type of credit is used mostly for unproductive expenditures at extortion rates - and most recently home loans were given quite freely to people who were not qualified and could never afford to pay back the loans.
Matthew 22:  36-40
Master, which is the great commandment in the law? Jesus said unto him.  Thou shalt love the Lord thy God with all thy heart, and with all thy soul, and with all thy mind.  This is the first and great commandment.  And the second is like unto it, Thou shalt love thy neighbour as thyself.  On these two commandments hang all the law and the prophets.

active_indolent

Economy is more a matter of opinions than a real sceince - and thats what it ought to be.
Lets go through some of your misconceptions (according to me).

You say that creating a debt by getting someone a IOU is equal to creating money. It might be true between the two parts that this is a form of money but it's not money for the reamaining soceity. It's not accepted as a medium of exchange for the rest of the soceity. So it's not money in that sense (perhaps it can be seen as a extreme local currency).

In a very unrealistic model ala Mises (and yes, he was a jew - promoting gold thats always been controlled by jews - the gold system has and will never be a good system – it's a fact that's hard to refute)  all money could be created in a ""voluntary cooperations" manner (using the Austrian schools rhetoric). But in reality I don't think it's realistic to think that all should create their own money (but on the other hand - the information technology perhaps will make the barter system possible again - one of moneys most important properties is being a information carrier  - Bartercard already exist and there  might be evolving P2P software serving a medium as exchange - bypassing the banks monopoly).  

I actually think you can see the difference between permanent money and credit. Did the tally stick disappear as credit money does when they are paid off? But I agree that defining money is not an easy task and more of a social construct and agreement (therefore should it be part of a democratic process and awareness in defining money).

Sure, the people on the Island should be forced to get someone else in debt in order to create new money. Is that something god for you?

But the point is that in order to increase  the money supply in a debt based  economy you have to increase the amount of indebted. Or how do you increase the money supply in a totally debt base monetary system?

I agree that credit can be a way of allocate money, but it should the be through something like "social credit", an open and democratic process where where no private interest are able to have special privileges. That would be a public bookkeeping system over the wealth of a nation and the dividends would be granted for all.

But not by letting private interests  create money, or more accurately credit,  from nothing  by  putting people in debt , extorting  pawn  (note that I don't agree with your more positive word "collateral").

You rightly point out the interest as a crock – but how are going to avoid interest if private interest with profit purpose are allowed to create credit? Why should anyone be interested in dealing with banking if there where no possibility to take a fee on creating credit? And if all money are credit then this fee will be on top on the existing money supply and hence an interest.

On top on that are some others factors

1)The obvious: Bank makes loans and it's in their interest to make as much as possible.

2)Credit compete with cash as medium exchange(we can argue whether cash is completely permanent or not, in my country it is, but the fact that it¨s more permanent then credit is hard to refute). If people use cash they  would deplete the base for the credit expansion so banks need to make people believe that credit money "grows", This leads to the bubble economy where the only thing growing is credit but people believe that the stock exchange or real estate market "grows" in value (but in realty it's inflation due to the credit expansion). In that way people are tricked into "save" their money in the virtual economy instead of taking out their cash. By expanding the credit (and hence the amount of debt slaves) they are able to uphold the illusion that credit money "grows".

So I find it hard to have a private banking system creating  credit  not making debt slaves of all.
Money should be seen as a something for the common good and shouldn't be created as debt by private interests.
"Throned above all, in a manner without parallel in all past, is the veiled prophet of finance, swaying all men living by a sort of magic, and delivering oracles in a language not understood of the people."

"The true equation is "democracy" = government by world financiers."
- J.R.R. Tolkien, in "The Letters of J.R.R. Tolkien"

targa2

I will deal with the last 2 posts 1 at a time.

Veritas.
Your biblical argument is based upon presumptions.  There was no such thing as a Jew at that time. They were Israelites.  The usurers of the day were pagan sun worshipers and slave traders. Yes , god did not want his chosen people to engage in usury among themselves, and yes they WERE the CHOSEN people at that time.  Chosen does not denote special. As a contractor, if I choose one of my employees to do some horribly dirty job in a cramped space,because he is the smallest person in my employ, it does not make him better, special, above or more holy than the others. It simply means chosen.  You also used the term "religious zealots ". This is an inflammatory statement and not necessary. It is also an opinion and cannot be substantiated. Quit acting like a mainstream news reporter.I will simply state, what seems to me to be obvious.  If God created all of us and wants one group , who were chosen by him to spread his message to the rest,to behave toward one another, I think I can logically assume that god wanted the same for ALL of us; at least eventually.  I rarely use biblical arguments to substantiate my position, although I could do so ,and very handily I might add.  I use mathematics and simply models.

You claim that an administrative fee and interest are the same. No...one is an administrative fee and the other is interest. Gee that was tough. Care to argue those semantics with your grade 3 English teacher. An administrative fee is never compounded. Even the IRS would not be dumb enough to place an admin fee in a compound structure. That is why the keep interest and penalties separate. One is compounded and the other is a fee.

We also have to separate " after the fact " financial transactions from " original issue " transactions. I am talking about about MONEY CREATION. This is original issue.  

You say........"the interest payment or fee come from his future labor". Labor denoted in what instrument????  Dollars ???? So this guy can just get dollars that were never originally issued at the point of creation ??? How does that work ? What he can get , from using his labor, is dollars from the general money supply. As long as not too many people try the same thing at once the system keeps going.  According to Stats Canada in 1995 the total Federal debt was 574 billion. 546 billion of it was compound interest.  That was over half of the current money supply in Canada at the time. If my former finance minister Paul Hellyer, who still does public talks at 85 years of age , tells me personally( which he did ) that the problem is interest, that makes me stand up and take notice. Doesn't mean I take it as gospel , but it surely is worth considering .

Here's an interesting model to prove my point.  Lets say we loan Joe the $100 and we mark each of the bills with a special chemical ink that is proprietary and secret to the issuer. We are using bills here and not digital money for a reason. So we can track it in the physical realm. We charge him 6% interest and tell him that he can only repay the debt in the original issue dollars with the special mark.  Can't be done can it.  What if all loans were done this way?  Impossible ! Irreconcilable ! There are not 106 of them to retrieve.  Because the money system operates universally the game can work for a period of time. Because bankruptcy acts as a release valve it extend the life of the game.  The game is a wealth transfer through interest based instruments of varying description, all of which attain there origin from original issue AT INTEREST.  Take away the interest motive and the game ends.

You asked the question" is it fair to lend to third world countries who have no hope of ever paying it back ```.  I have a better question.  Show me a first world country who has ever paid it back.  Can`t do it cause it has never happened in the history of the current system.

Come on guys. You gotta do better than this. I have been involved with tax protest groups, law research groups, monetary reform groups and community currency groups for 10 years now. It`s very tough to get one past me. Arrogance.....maybe   confident in my position. You bet.

So far I have never had anyone show me where the missing interest in the money supply comes from. Until you can you are on the wrong side of the debate. Pidcock agrees with this. Rafeeq agrees. Sydney White, who teaches monetary reform at the U of T, agrees with me. Bjerknes agrees. Social creditors agree.  The only people who do not ,are those who want to live in the future, off the productivity of those who create real tangible good and services today. Parasites.

 I have supported all of the mythologies at different points of my learning curve only to come back to the simplicity of the mathematical irreconcilability of the interest based money creation model.

Even the Protocols of Zion spell it out.

Protocol 21. 4

4. But when the comedy is played out there emerges the fact that a debit and an exceedingly burdensome debit has been created. For the payment of interest it becomes necessary to have recourse to new loans, which do not swallow up but only add to the capital debt. And when this credit is exhausted it becomes necessary by new taxes to cover, not the loan, BUT ONLY THE INTEREST ON IT. These taxes are a debit employed to cover a debit .... (Hence THE CRY TO BALANCE THE BUDGET!)

Any questions

targa2

Reply to active indolent.

At least we can see the flaw of the interest model. We just can`t seem to find the solution.  I don`t claim to have a complete solution either, but I know the interest has to go.

I  ask people a simple question to draw out their own self interest.  The question is this. If you had two banks on the block. One would give you a loan at 1% interest and the other at 0% ,which one would you get the loan from.

Most people with any amount of knowledge will immediately bawk at this model and say, `what motivation would any bank have to loan money without interest`.  ( you have heard the expression `a little knowledge is a dangerous thing )  This position is manifest in those who have no imagination I suspect. They sense the danger to their current reality in such maverick concepts of money creation because they don`t have even the basics of a workable definition for what money is. They saw Zeitgiest and are now instant experts or they are a financial planner or other such BOX thinkers.

Here is a potential model I conceive based on a private bank of original issue ( one that creates money) .This model should also bypass a central bank structure.  There should also be no reserve requirements.  The bank conjures the money into existence via your signature and has you put up collateral just like the current system.  They charge a $6 flat fee ( non compounding ). They create the original $100 and put it in your account.  The $6 fee is forwarded to the government to spend into the economy.This fee would always consist of cash. When the increments of the loan are paid, the money is taken out of circulation to a total of $106.  Of course this is an incomplete model but from an original issue standpoint it creates a balanced accounting.  There will always be $106 dollars in circulation for the borrower to retrieve through his labor. Bank fee rates would be legally decentralized to create competition on service fees.  All bank fees for services would be charged to the customer and issued as a cash credit to the government. Preferably local government to avoid excessive top down power. The Federal government would issue universal services to the local governments for which they would be paid by the local government from original issue service fee monies.


I am jot a proponent of destroying the entire system we have simply because it is not entirely flawed. It works pretty good in some aspects as is visible from what it has allowed us to create in terms of infrastructure to date. It simply has to operate in a way that balances it`s accounting so the money supply is never short.

active_indolent

What I can see your proposing Franklins Colonial Scrip modell which seemed to have worked flawless in Pennsylvania - and I agree - it's a possible solution. And using the current systems bank structure under democratic over sight seems also to be a good idea. But letting private interest create credit behind locked doors again - no - perhaps our thoughts diverge there?

I agree that many of the films, even though god hearted as "Money as debt", often spread many misconceptions instead of insights. "Money as debt" for instance teach the old story that the bank credit is created out of costumers deposits when in reality is that credit just are expansions of the banks balance sheets based on the bank reserves regulated by Basel2.  The impression that the bank makes new loans out of customers deposits is probably close to the intuitive feeling people generally hold that banks lend existing money that customers put on their deposits. So this view is probably close to  the way banks want you to percieve the process. But as you probaly already know, thats not the case. Still most monetary reformers suffers from this misconception.
"Throned above all, in a manner without parallel in all past, is the veiled prophet of finance, swaying all men living by a sort of magic, and delivering oracles in a language not understood of the people."

"The true equation is "democracy" = government by world financiers."
- J.R.R. Tolkien, in "The Letters of J.R.R. Tolkien"

veritasvincit

Reply to targa,

Firstly, I do have to agree with you that we are all equal in God's eyes and I believe the only chosen ones are those who choose God and choose to follow his laws - at the core level those laws are the ten commandments - and Jesus came to enforce those laws through his actions and through the basic concept of "do unto others".

Secondly, with regards to interest, there are various types of loans and the final interest owed is dependent on the type of loan and interest, amortization and compound frequency on the loan.
a)  simple interest on a fixed loan is very basic: $1000 @ 5% interest at the end of one year = $1050.00.
b)  a $100,000 mortgage @ 5%, amortized over 25 years, compounded bi-annually and paid monthly = $174,480.00
c)  revolving credit i.e. credit cards or business operating line of credit: the authorized credit amount is constantly revolving and the interest may either be fixed i.e. 18.5% extortion rates for credit cards or based on a prime bank rate for an operating line i.e. prime (3%) + 1% (note that 1% is static, however the 3% is ever changing and is based on the bank lending rate for that particular country - Canada is currently 3%.  This revolving credit is what get many people into trouble - especially credit cards because they are only required to pay the monthly minimum, which is usually only the interest and they never pay off the principal.  As long as the borrowers are paying their minimum - the credit card companies are more than happy to increase their authorized limit which get the borrowers even deeper into the downward spiral of credit.

So, back to the argument of fees or interest.  We could say that the $50 on loan (a) above is a $50 fee rather than interest and that the $74, 480 is a fee for the use of the $100,000 over 25 years.  You see, I am not arguing for banks because I know that the banksters, political puppets and their international Zionist greedy controllers are the problem with our current monetary systems (for argument sake, let's take banks out of the equation altogether.  What I am arguing is strictly interest - that interest in of itself is not evil.  It is necessary to pay for the use or administration of the borrowed money.  To use active_indolent's example "I agree that credit can be a way of allocate money, but it should the be through something like "social credit", an open and democratic process where where no private interest are able to have special privileges. That would be a public bookkeeping system over the wealth of a nation and the dividends would be granted for all."  This may be a solution.

My example based on private lending:
You, targa have decided to lend me $100,000 ( 5% and amortized over 10 years = $126,780) because you have excess capital that you earned in the past through your profitable business.  You have decided to make this loan to me because firstly, you have done your due diligence on my business plan and feel that your excess capital would be best put to use by lending it to me at 5% rather than investing in anything else.  We have a contract in place and to ensure that you receive the capital and interest back in case I do not follow through on my business plan, I will put my home up as collateral.  Now the outcome of this story is that my business flourished by providing a valuable service and much needed employment in my community.  You end up with the benefit of the $26,780 you earned on your money that you would otherwise not have made any use of.  A win/win/win situation.  

Now where did this interest or fee that you earned from the loan of your money to me, come from?     It came from my labour and that of my employees.  I guess we could call this credit expansion based on real production.  The origination of the loan came from real assets.

Thirdly, to quote Paul Hellyer, former Finance Minister of Canada in his book "Goodbye Canada" – " It should be apparent that our present system of privately created money is not sustainable.  The only reason we survived so well in the early post World Ward 2 years is because the money creation function was shared with government.  The Bank of Canada provided the federal government with significant sums of near zero interest money which gave it some fiscal flexibility.  In addition, interest rates in the 1950s and 1960s were low – about equal to the growth rate of the economy.  Consequently total debt grew in proportion to the economy but the debt to GDP ratio held steady.  Actually it was the system of shared public/private money creation which got us out of the Great Depression.  This was the monetary system that gave us the best 25 years of the twentieth century.  All of that changed in 1974 when the Bank of Canada adopted the economic ideas of Milton Friedman and his colleagues including privatized banking and volatile interest rates.  It has been downhill ever since."  

Finally, how do we solve the existing global Zionist monetary financial nightmare that we have been living in:
1)   Inform people about these international, greedy, power mongering international bankster Zionists and refer the people to sites like the infounderground and iamthewitness.
2)   Limit our use of credit and pay down revolving credit cards monthly – we, the goyim have been playing right in their hands
3)   Teach our children to save and to borrow against real assets, growth and production.  
4)   Write to our governments for reform – one request from a citizen represents 13,000 people
5)   Stop watching TV, and reading any popular media including newspapers – the majority of this information is propaganda & brainwashing
6)   Get back to the idea of community and support local businesses and farmers – we again are playing right into their hands by supporting the international monopolized capitalistic businesses – i.e. Wal Mart, Monsanto etc.,
7)     Think as an individual but consider everyone.
Matthew 22:  36-40
Master, which is the great commandment in the law? Jesus said unto him.  Thou shalt love the Lord thy God with all thy heart, and with all thy soul, and with all thy mind.  This is the first and great commandment.  And the second is like unto it, Thou shalt love thy neighbour as thyself.  On these two commandments hang all the law and the prophets.

targa2

Simple question. Where does the $26,780 in interest come from if the only source for money creation is the banks, and they never create it.

Protocol 21

4. But when the comedy is played out there emerges the fact that a debit and an exceedingly burdensome debit has been created. For the payment of interest it becomes necessary to have recourse to new loans, which do not swallow up but only add to the capital debt. And when this credit is exhausted it becomes necessary by new taxes to cover, not the loan, BUT ONLY THE INTEREST ON IT. These taxes are a debit employed to cover a debit .... (Hence THE CRY TO BALANCE THE BUDGET!)

I take the Zionist bankers at their word.

active_indolent

The magnitude of the slaughter due to this jewish debt based usury system is beyond comprehension.

I found this article:
"Washington has fomented not only military conflict in Africa but also an economic war through its agents the World Bank and the IMF. The Structural Adjustment Programs (SAPs) imposed by these institutions on 36 African countries since 1980 have devastated the continent, decimating national economies and health and education systems. SAPs offer loans on condition that governments drastically reduce public spending (especially on health, education and food subsidies) in favor of repayment of debt owed to Western banks, increase exports of raw materials to the West, encourage foreign investment and privatize state enterprises; the last two steps mean selling whatever national assets a poor country may have to Western multinational corporations. Under SAPs, Sub-Saharan Africa's external debt has actually increased by more than 500% since 1980, to $300 billion today. In 1997, the United Nations Development Programme (UNDP) stated that in the absence of debt payments, severely indebted African countries could have saved the lives of 21 million people and given 90 million girls and women access to basic education by the year 2000. The All-African Conference of Churches has called the debt "a new form of slavery, as vicious as the slave trade." "

21 millions dead only i Africa during 3 years! How many millions upon millions haven't been killed by this system in Africa, Latin America, Asia, Russia and so on, during all centuries?  

http://www.minesandcommunities.org/article.php?a=1680
"Throned above all, in a manner without parallel in all past, is the veiled prophet of finance, swaying all men living by a sort of magic, and delivering oracles in a language not understood of the people."

"The true equation is "democracy" = government by world financiers."
- J.R.R. Tolkien, in "The Letters of J.R.R. Tolkien"

targa2

And they will have even less of a chance of getting out from under the debt, not that we have a chance either.

Interest is criminal.

  "If I lend you the only 10 dollars in existence and ask you to pay back 11, I have asked you to do the impossible."
                                                             
                                                                Richard Kelly Hoskins........ War Cycles Peace Cycles.

mobes