| Subject: | Re: [socialcredit] Re: Definition of usury. | | Date: | Sunday, July 6, 2008 12:33:07 (-0600) | | From: | Martin Hattersley <jmartinh @....ca>
|
| In reply to: | Message 5450 (written by Swieto Radosci) |
I think it's time to point out again that the problem with banking is not
necessarily the rate of interest being charged, or the terms of repayment,
but the fact that when banks make a loan by creating new credit, both bank
and borrower are making a profit at the expense of the community.
The banker, by the return of interest that he charges (over and above his
administrative costs, of course), but the borrower, because by the help of
bank financing, he is able to afford a much more expensive house, and a much
better car, than would otherwise be the case.
So two people benefit, the borrower and the bank. The loser is the community
at large, the value of whose money has been diluted by the added supply
created by the bank, so that the level of prices has shot up. Nowadays, we
have been conditioned to be reconciled to inflation of only 1% to 3% per
year (!), and the dollar that was worth a dollar fifty years ago is only
worth ten cents today. If we, poor suckers, don't tolerate that, the money
supply will disappear, and our whole economy, including the jobs we depend
on for income, will disappear.
Douglas's Just Price mechanism would deal with this problem, and would not
need more administration than we have at the moment, by putting the
mechanism of our current Goods and Services Tax into reverse.
Watch out in the next few months, as "stagflation" really takes hold in the
Western world. The system is showing acute signs of stress and desperately
needs correction, but "Millions would rather die than think. Millions do."
Martin Hattersley, 5929-189 St.,
EDMONTON AB CANADA T6M 2J1
Phone (780) 483-5442
e-mail <jmartinh@shaw.ca>
----- Original Message -----
From: "Swieto Radosci" <radosc@radosc.x.pl>
To: <socialcredit@elistas.com>
Sent: Sunday, July 06, 2008 5:05 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
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>
>
> ------------------------------------------------------------------------
>
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