| Subject: | Re: [socialcredit] Re: Definition of usury. | | Date: | Monday, July 7, 2008 21:41:05 (+0200) | | From: | Swieto Radosci <radosc @........pl>
|
| In reply to: | Message 5451 (written by Joe Thomson) |
Hi Joe, I understand that JAK practice may look deceptive under US law,
but certainly it isn't so under European law, which probably is better
construed to cover legally such experiments in the field of alternative
banking.
On the other hand it is hard to compare systems based on different
philosophies, because many aspects of any calculation are ignored,
especially social aspects.
Banks should serve us, people, not vice versa. I am sure that people in
Sweden are wise enough to know, how much they pay for their credit.
They also know for what social purposes JAK Bank's (maybe higher than
normal) profits are spent and imho that's the clue of JAK experiment.
Kristof Levandovski
Joe Thomson pisze:
> 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.
>
>>>
>>>
>>> ---------------------------------------------------------------------
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>>>
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>>>
>>>
>> ---------------------------------------------------------------------
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>>
>
> ---------------------------------------------------------------------
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>
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