Investing in precious metals 101

For or Against Usury

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  • Tue, Feb 02, 2010 - 11:05am

    #71
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    Re: For or Against Usury

[quote=Thomas Hedin]

The belief that we have a free market is as about as rediculous as saying that its our money.  I do understand we’ve all been told these enourmous lies, but the simple truth is the banking system owns and controls either directly or indirectly the markets, prices, and availablty of all goods and services because they own and control 100% of the money in circulation, and at any given point in time can dry up the money supply and completely shut the system down, and in the process transfer all of the real wealth over to a few private hands.

 

[/quote]

 

HAHAA Yeah Free markets, what a joke.  Our Free Markets is a mirror image to The Propaganda of Freedom that we have.  We have Privileges not Rights, cause when the government wants to they can take your privileges away. 

 

  • Tue, Feb 02, 2010 - 07:26pm

    #72
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    Re: For or Against Usury

Father Charles Coughlin, a famous Catholic priest of the Diocese of Detroit, wrote a book entitled “Money! Questions and Answers” in 1936.  In it he explains the definition of usury:

Usury is a breach against the commandment “Thou shalt not steal”, and is related to three specific immoral actions listed under the following: (a) Charging an unreasonable and abnormal rate of interest. (b) Charging interest on any recognized non-productive or destructive loan. (c) Charging interest on a loan of fictitious money which the lender created, thereby demanding from the borrower an unjust return, in the latter case, the lender reaps where he did not sow.

The other moral and legal problem with our system is that it represents a contract that cannot be full filled collectively by the people.  The interest charged is never created to repay the loans, there will always be more debt than money.

For example, let’s say a nation wants to have money to conduct commerce but they do not want any private debt and insist that government must borrow as little as possible.  They decide that they will need $100 billion dollars in circulation at all times to keep the economy running smooth.  The central bank creates the $100 billion at a 6% interest rate.

After the first year, the bank is owed $106 but there is only $100 in circulation.  The $6 billion needed for interest must be borrowed from the bank, so now the bank is owed $106 billion.  The nation maintains $100 billion in circulation.  The next year the bank is owed $112.36 ($106 billion + 6% interest).

After 10 years, the nation would owe over $179 billion to maintain their $100 billion in circulation.  After 70 years, the debt would reach a sum $5.9 trillion dollars to maintain $100 billion in circulation.  And this is with absolutely no borrowing beyond the need to have some money in circulation.

Larry

  • Fri, Feb 05, 2010 - 03:10pm

    #73
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    Re: For or Against Usury

 

I think we need a hybrid of currencies to balance out the P to P+I problem.  Since there will always be more debt than money in the system, we need a competing currency to fill the gap between them.  I know Ron Paul is putting up a bill for competing currency.  

  • Fri, Feb 05, 2010 - 04:23pm

    #74
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    Re: For or Against Usury

But all the competing currencies in Paul’s plan will no doubt be just another debt-based form of paper/electronic crap pumped out by banks, still has the interest/usury problem.  That’s what we had at other times in American history when smaller profiteering bankers just competed with each other to see who would ruin their paper the fastest causing huge inflation/deflation turns. 

In my view, this is the danger of Paul’s movement.  If we end the Fed before something truly innovative is done, then that will just free up the parasites on Wall St to loot things even faster than they already are.  Without the Fed governing them to some degree by controlling their underlying cost of capital, their reserves, etc, Chase, Citi, BoA will have free reign.

I think Paul needs to consider options outside the banks when he talks of competing currencies.  As long as they’re in the banking industry, they’re not really competing currencies because it’s all one type of money–debt. 

  • Fri, Feb 05, 2010 - 11:08pm

    #75
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    Re: For or Against Usury

 

If  Joe the baker  came to me and asked to  lend him  money so he could take advantage of an opportunity,   should I get compensated for it?

 And  who should determine the price,   or interest rate (my compensation)   Joe and me or someone else?    I’m assuming  here that Joe will agree on a price only after he has  weighted his borrowing cost against his potential gain.   Are we doing something immoral here?  

  Don’t get me wrong,   I despise the way banks operate but I see nothing wrong with a loan per se.    They  (banks) should be reduced to safekeeping peoples savings, and loans should be limited to contract  time deposits under severe penalties for breaking that contract.   They can serve as a conduit for channeling savings (time deposits) to job creating production.  

Joe the baker will have use of the money now for his purpose and he will pay down the loan over time as per our agreement.   The same applies if the amount happened to be in the Trillions.   He  will pay me according to our agreed upon payment schedule —-over time.  

  This would make it appear as if there is more debt than there is money currently circulating,    because there is.        

Lending money has been around a very long time but it was usually the lenders own money.   The practice of lending other peoples money began in 17th century England and evolved to what it is today.   This I think is at the core of the problem where inflation and economic dislocations originate.

The only thing that stopped Americans from using gold coins and gold backed dollars is the US government itself.   I think Ron Paul is calculating that if the legal tender was lifted,   Americans will again resort to using gold or gold backed money simply because we’ve used them before.   Doesn’t seem farfetched.   I doubt foreign producers would refuse a gold backed money as payment for their goods.  The US government can force Americans to use  a new  form of money by edict,   but it may not be as easy with our foreign trading partners.

  If politicians were able to create money themselves,   they will add to these:   Social Security,  Medicare, Medicaid, Tarp 1 and 2, TALF,FEMA, Fannie and Freddie, AIG,  Detroit,  Iraq and Afghanistan (hell might as well fund IRAN just in case) Welfare, Foreign Aid,  Pork Barrel projects for everyone.   Money decisions would be guided by politics of course.    What  else could we expect :    liberty, sound money and free markets?   

        What is going to stop them,  the US constitution?      

 

  • Fri, Feb 05, 2010 - 11:50pm

    #76
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    Re: For or Against Usury

[quote]If  Joe the baker  came to me and asked to  lend him  money so he could take advantage of an opportunity,   should I get compensated for it?[/quote]

– Only if you actually loan him money, not a fake contract that does nothing except obligate Joe to pay YOU money + interest or you take his assets.  If you tried that, you’d be put in jail.  But bankers become rich because that’s what they do, while the folks they loan to like small farmers and businesses who do all the value creation in our society go broke.

– Take a commission like any other middleman fee.  Quite different than the compounding usury system.

– It’s not a valid analogy to the banking/usury system we’re debating.  You’re assuming real money exists and you’re just adding a tiny increment to buy a car.  The problem is the current system is nothing but debt, principal + interest, that is impossible to pay back on a macro basis.

[quote]If politicians were able to create money themselves,   they will add to these:[/quote]

Banking propaganda is amazing.  They already virtually destroyed the country with $100 trillion in public debt including all the unfunded liabilities you list, but they have us thinking our elected leaders might add a little more if they actually take their constitutional power back!

 

  • Sat, Feb 06, 2010 - 01:23am

    #77
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    Re: For or Against Usury

 

If  Joe the baker  came to me and asked to  lend him  money so he could take advantage of an opportunity,   should I get compensated for it?

 

Banks DO NOT loan out money, they loan Promissory notes @ interest.  Only 3% of the money supply is in physical existence according to the book Web of Debt.  

If you and I are stuck in a  locked room and I give you a Dollar, but I tell you I want 2 dollars back by tomorrow, good luck.

 

  • Sat, Feb 06, 2010 - 03:05am

    #78
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    Re: For or Against Usury

 

Good luck to you because if you gave me a dollar you’re not getting it back, and better luck getting me to borrow on those terms.  

So what was it that banks used to loan out that was considered money?

 

  • Sat, Feb 06, 2010 - 01:16pm

    #79
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    Re: For or Against Usury

I still don’t believe this is true.  Bank makes loan, lender spends money so now it is being circulated.  Lender defaults on loan.  Bank either absorbs the loss with profits or goes under.  If banks goes under, FDIC steps in and makes depositors whole.  All this results in money in the sytem that is never destroyed and not tied to debt.

You’re correct that the bank has to absorb the loss with profits or it goes under, but that aborbtion of profits gets applied to the principle part of the loan, and extinguished.  If this was not the case, it would be impossible for a bank to go under.

Did I ever say all money is created as interest bearing loans? No.  As long as you have some amount of money not loaned you can pay off the interest as the money circulates in the system.

You’re correct that as long as you have some money put into circulation without debt you can pay the interest as that money circulates into the system, except there is no money put into circulation without the borrowing mechnism.  There simply is no money unless someone goes in debt for it to exsist under this rediculous system.

This is where we are going to just have to agree to disagree as I don’t believe the assumption” that “all money is loaned into existance” that makes the basis of your argument.  At any rate, what I have said, many times, it that I believe FRB can probably co-exist with other systems.

Can you show me any mechanism where there is money being put into circulation without debt?  I’ve researched this heavily and I cannot find a single place where there is money without debt in this money system.  FRB, or lets call it what it really is, debt money, cannot compete with wealth money.  This is why the bankers remain so active in keeping the very thought of money without debt out of the peoples minds.

What we need is competition in currencies.

How would competeing currencies have any effect on our money supply?  Currently the paper currency does not have any effect on our total money supply.  I would like to hear more about why you think competition in currencies is a viable solution?  How will this new currency be moved into circulation and under what princples will it operate?  Are you concerned about the effects of have multiple currencies with past disasters with trying to have a non-uniform system.  If one part of the country does not accept that competing currency how will you resolve that issue?

Yes my self and some business partners did it with nearly no debt, that is we bootstrapped the company.  Grew it to 50 employees and then sold it. Have you?

I’m confused, if it was such a great profit making machine why did you have to go into any debt what so ever?  Why would you sell a company that is generating such a great profit?  Yes I have ran a company before, but I realized ahead of time that it’s impossible to run a company in the long run using borrowed money, and now I spend my days focusing on how out monetary system can be fixed so businesses can actually profit in a system, instead of trying to profit in a system where it’s really impossible to profit.

Can you explain how this will work?  In a way that is not run by a government?

I used to spend a lot of time trying to explain this, in a way that is not run by government, but ran by the people themselves at the local level, but chris martenson has banned me from discussing this sort of talk on his website.  I wish I could answer this question but I cannot. 

As far as how you get new currencies into use?  I believe if you remove the legal tender laws and capital gains and sales tax for anything used as a currency, you will have new currencies “spontaneously be created” as described in the crash course.

Will any of these spontainious currencies be accepted for payment of the peoples debts?

There is no reason we need a single currency in use.

How would you deal with the issue of having one currency accepted in one area of the country and not in another?  If new york  city had it’s own currency and it was not accepted anywhere else how would the people of New York city conduct any commerce even with sarycuse N.Y.?  How would you deal with having thousands different currencies in the USA?  How would you know how much each currency should purchase compared to the currency in your local area?

  • Sat, Feb 06, 2010 - 01:22pm

    #80
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    Re: For or Against Usury

I think we need a hybrid of currencies to balance out the P to P+I problem.  Since there will always be more debt than money in the system, we need a competing currency to fill the gap between them.  I know Ron Paul is putting up a bill for competing currency.

If the problem with out money is the fact that is all comes into exisistance as an interest bearing loan, then wouldn’t a solution be for the people to get out of debt and still have a functioning meduim of exchange be to put some principle into circulation that can be used to destroy both principle debt and interest?

I unaware of Ron Paul pushing for debt free money/currency.  I’ve never even heard him mention debt free money at all, but I could be wrong.  Does anyone have any sources?

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