| Subject: | Re: [socialcredit] Re: Definition of usury. | | Date: | Sunday, July 6, 2008 13:05:05 (+0200) | | From: | Swieto Radosci <radosc @........pl>
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| In reply to: | Message 5447 (written by william_b_ryan) |
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.
>
>
>
>
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