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Message 5451
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| Subject: | Re: [socialcredit] Re: Definition of usury. | | Date: | Sunday, July 6, 2008 09:18:48 (-0700) | | From: | Joe Thomson <thomsonhiyu @....ca>
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Kristof, the issue Bill Ryan raised concerning the JAK Bank is NOT one of
"higher fees" or "lower fees" in regards to the choice of the first and
more services, or the latter and less services, per se, but rather whether
it is clear to JAK's customers what they will REALLY be paying in interest
for the amount of the loan actually available to them before they sign up
for one.
It is certainly up to those customers in any free-market democracy to decide
where they will or will not bank. And hopefully they'll have many
financial service providers from which to choose, and there'll be
'competition' amongst them to be innovative and provide the level of service
desired. And we will always be able to pick the one who best serves our
needs based entirely on our own preferences.
But to make a truly meaningful comparison in regards to the COST of any
loan there certainly should be legislation in place similar to the American
"Truth in Lending" law.
And from what Bill has explained to Per and all of us, just now and also at
times past, it would seem that the actual cost of a loan from JAK Bank is
not only higher, but would constitute a deceptive trade practice under
American law. Since the 'true' interest rate cost of what he'll be paying
for what he's actually getting is apparently not revealed to the Bank's
customer beforehand.
So far as "Social Credit" is concerned, we favour the 'de-centralization' of
banking, and freedom of choice for the customer in that area as in all
others.
And if the small Bank or other financial services provider can offer better
services, or innovative ways to deliver its products, all the better for
society as a whole and its customers as individuals.
But the calculation of the 'true'interest rate for comparative purposes, so
the customer knows just what he's paying for in regards to what he's
actually getting, should certainly be revealed beforehand so he can make an
informed choice.
Joe Thomson
----- Original Message -----
From: "Swieto Radosci" <radosc@radosc.x.pl>
To: <socialcredit@elistas.com>
Sent: Sunday, July 06, 2008 4:05 AM
Subject: Re: [socialcredit] Re: Definition of usury.
> In democracies bank customers should have a choice how much fee they
> want to pay for banking services.
>
> It is normal that little shop has higher margin than a hipermarket, as
> it is obvious that small ecological egg costs more than a big one from
> hen's concentration camp. And it is normal that some customers prefer
> smaller eggs and higher fees for more local services (supporting
> locality as a value), as it supposedly occurs in small JAK bank,
> competing with global banking system.
>
> It seems abnormal that some legal acts prohibit free competition in the
> local banking area. As I see it from WB Ryan's explanation, US
> regulations cannot be treated as a pattern to follow because they
> prohibit and penalize innovations and free competition in the banking
> industry, which is glue of every modern and civil society.:)
>
> Higher fees? Why not if we locally decide who and for what spends them
> and while we recirculate them locally for further benefits?
>
> Kristof Levandovski
>
> william_b_ryan@yahoo.com pisze:
> > The problems with interest on money (the unearned income part) and with
"fractional reserve banking" would not disappear by just ignoring them.
> >
> > Per Almgren
> > -------------------------------------------------------
> >
> > What is the "unearned income part" of interest on money? Perhaps you
will tell us, Per.
> >
> > It is most definitely earned and in the modern creditary economy is the
service charge for a financial service being rendered, which includes four
components: 1) ordinary business expenses incurred in supplying the service,
including salaries and wages being paid to employees; 2) default premium to
cover loans being defaulted; 3) inflation adjustment to cover inflation; and
4) profit.
> >
> > Your problem, Per, is that you have Gesellist ideology imprinted on your
brain, and can't see that the so-called "interest free" bank you are
associated with (JAK) actually charges several times the interest rate
charged by conventional banks.
> >
> > The reason for this is that JAK requires forced savings that are not in
reduction to principal, such that the various fees being charged are against
what is in reality a much smaller principal than JAK claims, effectively
increasing substantially the real interest rates being charged.
> >
> > See the attached diagram. Notice that approximately half way through
the amortization period the effective principal has become zero. Past that
point it has effectively become negative, yet the borrower continues to pay
fees to JAK on non-existent principal.
> >
> > >From the Federal Reserve Bank of Chicago:
> >
> > "Required (compensating) deposit balances: A bank may require that a
borrower maintain a certain percentage of the loan amount on deposit as a
condition for obtaining the loan. The borrower, then, does not have the use
of the entire loan amount but rather the use of the loan amount less the
amount that must be kept on deposit. The effective rate of interest is
greater than it would be if no compensating deposit balance were required."
> >
> > For claiming to be "interest free" the JAK bank would be a deceptive
trade practice in the United States.
> >
> >
> >
> >
> > ---------------------------------------------------------------------
> > Some introductory materials to the discussion topic of this list are at
> > http://www.geocities.com/socredus/compendium
> > You're subscribed to this list with the email radosc@radosc.x.pl
> > For more information, visit http://www.eListas.com/list/socialcredit
> >
> >
> > ------------------------------------------------------------------------
> >
> ---------------------------------------------------------------------
> Some introductory materials to the discussion topic of this list are at
> http://www.geocities.com/socredus/compendium
> You're subscribed to this list with the email thomsonhiyu@shaw.ca
> For more information, visit http://www.eListas.com/list/socialcredit
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