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Rationalizing Usury: the Time Value Hoax

Uncle Scrooge, a famous UsurerReal Currencies

So I’ll get down upon my knees and bless the Working Man, 
Who offers me a life of ease through all my mortal span; 
Whose loins are lean to make me fat, who slaves to keep me free, 
Who dies before his prime to get me round the century. 
Whose wife and children toil in turn until their strength is spent, 
That I may live in idleness upon my ten percent. 
And if at times they curse me, why should I feel any blame,
For in my place, I know that they would do the very same. 

(John Turmel, Thoughts of a Rich Man on Usury)  

The idea that ‘the lender can’t use the money when he lends’ is the classical argument to rationalize Usury. But the bank doesn’t lend anything. It’s all credit by bookkeeping.

The ‘time value of money’ is the notion that holding money today is worth more than tomorrow. Between today and tomorrow there will be inflation and the missed opportunity of investing it.

It is at the core of modern theory of finance. It is the rationale for Usury, it can be heard each and every time when people defend it. It is the defining belief that creates acceptance for interest on loans of money.

Because Usury is supposed to be the compensation for the ‘lost’ ‘time value’ to the lender.

People will also point at risk, but there is no risk, there is collateral. Only bogus credit card debt and consumer loans are without collateral and the interest on these kinds of loans can be quite astonishing. But for serious credit, business loans, mortgages, there is collateral and there is no risk to the lender.

The fact that the time value idea still holds so much sway is quite astonishing, after 12 years of Truth Movement and mass exposure of fractional reserve banking.

Because the fact is: nowadays the creditors are usually banks and banks don’t lend anything. They create credit, by bookkeeping. That is what fractional reserve banking is: double-entry bookkeeping, in which debit and credit are implicit and automatic.

It is one thing with simply uninformed people, including most economists who are remarkable mainly for their ignorance in monetary matters. It is borderline bizarre with the Austrians, who are famous for their analysis of fractional reserve banking. But how can one on the one hand defend the ‘time value’ hoax and on the other hand explain that the banks create money and don’t have reserves for what they purportedly lend? It creates quite a cognitive dissonance.

The banks don’t lend and that’s why the ‘time value’ ‘argument’ is a total hoax. Utterly irrelevant. The bank wins nothing by creating money (other than the opportunity to extort the ‘borrower’, who doesn’t realize he isn’t borrowing anything real) and it gains nothing when the money is repaid: the bank takes it out of circulation and the money just ceases to exist as a concept. There is nothing in the books anymore.

The Austrians, and indeed also many paper money reformers, then go on to claim the problem is that the bank creates money! And that we will all feel much relieved when these are indeed savings when we borrow from the bank. Then our sense of ‘justice’ is satisfied.

This hoax is known as ‘full reserve banking‘ and nowadays there is a growing and unisono choir for ‘reform’ of banking based on this idea. The Financial Times’ Martin Wolf wants it. The Frankfurter Algemeine splashes a front page with this great idea. Dutch television is soon airing a major program defaming fractional reserve banking and hallowing our right to pay interest to ‘savers’ (the rich), instead of bookkeepers.The IMF is writing positively about it.

We don’t realize that this means that we will continue paying the same amount of money. Why aren’t we asking ourselves the question ‘but if the bank creates the money by bookkeeping, why am I paying interest?’

That is of course the rational response to the awareness that money is created at close to zero cost.

But even if money was printed debt-free or if we use Gold to back all the money, usury would still be both wrong and unnecessary. Because why do people save? To use it later! They don’t want to use it now, otherwise they would not save! So they lose absolutely zero by not being able to use it now if they lend it out. Not using it now but later is the essence of saving! And if we are not going to use it now, why not let somebody else use it in the mean time??

And even when we think of inflation we are wrong: most ‘inflation’ in the sense of rising prices since the war was caused by ever higher interest charges passed on through prices. It was not caused by money printing, the extra money was printed to pay off the usury. Interest bearing money cannot exist without eternally rising prices (or eternal deflation when the money supply cannot grow, as is the case with Gold). Interest-free money, on the other hand, will see stable prices if managed correctly.

So there is no ‘time value of money’. The rich are just insanely addicted to money and they want more. So they have sly idiots (‘economists’) think up excuses to explain it’s all so necessary and pay them a few hundred grand per year to have it look good.

Inconvenienced millionaires
Why do people have difficulty to see the iniquity of Usury? Someone recently said it is because people don’t see themselves as poor, but as ‘temporarily inconvenienced millionaires’. We are all raised to work hard and expect ‘success’. And ‘success’ is making a bundle and then retiring, having other inconvenienced millionaires sweat away to service the loans we will be giving them through our mutual funds.

But: working hard has little to do with it. There would be many millionaires if working hard was leading to wealth. It’s true that genius expresses itself through a combination of talent and hard work, but most of us are just beta males and the opulent want us to lick their boots, not to join their ranks.

We are raised to be ‘responsible’ adults and are told frugality and saving are a real part of that. We are learned the magic of compound interest at school. Nobody is telling us some other guys have picked up this trick a few centuries ago and have a bit of a head start, ripping society apart with the trillions that compound interest is now making them yearly. We are not told that paying compound interest to the rich is what is keeping us poor. No, morons like Peter Schiff now say we need to save more and we need incentives for that: higher interest rates. Peter Schiff is not explaining how people, who already lose more than half of their income to usury (partly passed on in prices and taxes), are going to save more when they have to pay even more interest to the rich, while they are already living from pay check to pay check, as most Americans are today. Even a good man like Paul Craig Roberts falls for this. It’s our economic illiteracy, not understanding money and Usury.

Because the simple fact is: by saying ‘I wouldn’t lend without interest’, we relegate ourselves and our brethren to interest slavery. Because we don’t lend, we borrow. By not lending to our brethren, they will not lend to us. We will have to go to the rich and to the banks. Why was the middle class sending their children to the bank for a mortgage when they had the assets to set them up with a good start in life with an interest-free mortgage? Why are people worrying about their savings today, while at the same time their children face foreclosure? Why are these savings not sunk into paying off the banks to save the wider family from the losses to usury?

We talk about ‘corruption’ in finance but we don’t see that finance itself is corrupt.

By saying: I want interest, we say it’s alright that we pay 300k interest over a 200k mortgage over 30 years. We say: it’s grand that I lose up to 40% of my income to usury passed on in prices even if I have zero debts. We say: how splendid the Government is losing up to 450 billion per year on servicing the National Debt. How great that there is income tax to pay off this money to the ueber-wealthy. We say: how magnificent that the ultra poor nations lose up to ten times more to usury on their foreign debts than they receive in development aid. We say: ah, just don’t get into debt, even when there would be no money if there was no debt. We say: yes, let’s destroy all economies with insane austerity, because the interest on this freshly printed money must be paid off.

Because, hey, I wouldn’t lend without interest!

Conclusion
There is no ‘time value’ of money. It is all created by bookkeeping and the bank loses nothing. It creates the money when lending and retires it when repaid. But even when we talk about savings, there is no real ‘time value’.

Meanwhile, when we say ‘I wouldn’t lend without interest’ we are just parroting the line of the rich. We don’t realize that we are the ones paying and that we should be saying: “hey, I’m an interest-slave, how do we bust this ‘time value’ hoax, I need interest-free credit, I don’t want to be a slave.”

But for that we have to rid ourselves of the slaver in our selves. We must abandon the American Dream. That nightmare of striking it rich and putting our own boot on the face of our brother.

Credit can be interest-free if it’s mutual. I give you credit, if you give me some. We don’t even have to give up any real money: we can have a credit facility keep the books at cost price. Credit and Debit are just two sides of the same coin in double-entry bookkeeping.

Yes, it requires a little new thinking, a little shedding of wrong beliefs. But the poorest 80% (us) are paying up to 10 trillion in usury per year globally to the richest 10% and most of this money actually ends up with the 1%. That 1% now owns 43% of all assets in the world and the poorest 80% (us) own only maybe 10% if we’re lucky. Usury is what is causing this. Even if we have zero debts, 40% of our disposable income is lost to usury passed on in prices, so it has nothing to do with ‘personal responsibility’. It is the System that we prop up that is keeping us down.

It is when we start to see this, when we start to see what exactly is making these ghouls in London and Wall Street so incredibly wealthy, that we can begin to mend the destruction that the Money Power has been wreaking for many centuries now.

http://realcurrencies.wordpress.com/2013/12/11/rationalizing-usury-the-time-value-hoax/

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2 Responses to Rationalizing Usury: the Time Value Hoax

  1. Hawkeye says:

    Steve,

    Thank you for another insightful article that strikes at the root of the problem!

    For supporting documentation of the Christian(pre-1500 AD)anti-usury position, I recommend Michael Hoffman’s “Usury in Christendom: The Mortal Sin that Was and Now is Not”.

    Merry Christmas!

  2. Crying Teeth says:

    On the “INIQUITY of USURY.”

    “Behold, Yahweh maketh the earth empty, and maketh it waste, and turneth it upside down, and scattereth abroad the inhabitants thereof. ”

    “And it shall be,
    1) as with the people, so with the priest;
    2) as with the servant (or slave), so with his master;
    3) as with the (poor) maid, so with her (rich) mistress;
    4) as with the buyer, so with the seller;
    5) as with the lender, so with the borrower
    6) as with THE TAKER OF USURY, SO WITH THE GIVER OF USURY TO HIM. The land (earth) shall be utterly emptied, and utterly spoiled: FOR YAHWEH HATH SPOKEN THIS WORD.”

    Read the rest of Isaiah 24 to get the full picture of how USURY and “the mark of the beast” “NUMBER OF HIS NAME” BANKS are a great sign of the end because “the inhabitants (of the earth)…have transgressed the laws of God…broken the everlasting covenant (the ten commandments—which specifically prohibit the IDOLATRY AND COVETOUSNESS of USURY: see the first and tenth commands in Exodus 20!).” Vs 5

    “If thou lend money to any of my people (ALL the people the Creator made upon the face of the earth) that is poor by thee,
    THOU SHALT NOT be to him as an USURER, neither SHALT THOU lay upon him USURY.” EX. 22:25

    “And if ye LEND to them of whom ye hope to receive, what thank have ye? For sinners also lend to sinners, to receive as much again. But love your enemies, and do good, AND LEND, HOPING FOR NOTHING AGAIN; and your reward shall be great, and ye shall be the children of the Highest: for he is kind unto the unthankful and to the evil.” Luke 7:34;35

    USURY USE IS A TWO WAY STREET.

    Not only are “the bankers” and “merchants of the earth” (or government) NOT to charge USURY—-

    “The nations” of the earth are NOT to enter into USURY with them! (Read Isaiah 24:1-2 above again!)

    “LORD, who shall abide in thy tabernacle? WHO shall dwell in thy holy hill?…HE (of the people) THAT PUTTETH NOT OUT HIS MONEY TO USURY, nor taketh reward against the innocent. HE THAT DOETH THESE THINGS SHALL NEVER BE MOVED.” PSALM 15:1,5.

    Here’s some sound advise from the living God for all BANKERS:

    #1—-Find a new Job or reform your bank!
    #2—-“If thy brother (fellow human) be waxen poor, and fallen in decay with thee; then thou shalt relieve him: yea, though he be a stranger, or sojourner; that he may live with thee.” That’s right! Instead of putting that mortgage defaulter out on the streets, think twice, and/or bring him or her home with you that “he(she) may LIVE WITH THEE.” Leviticus 25:35.
    #3—REFORM!—“TAKE THOU NO USURY…OR INCREASE:
    #4—“BUT FEAR THOU ELOHIM (God)!:
    #5—“THOU SHALT NOT GIVE HIM THY MONEY UPON USURY, NOR LEND…FOR INCREASE.”

    The entire end time back-drop of the “mark of the beast” has for its foundation in the world THIS ISSUE OF THE INIQUITY OF USURY which the Roman Papacist/Zionist bankers manage!

    Read Revelation 13:11-18; 14:8-12 and the WARNING!

    Read Revelation chapter 18 and see what will happen to the entire “merchants of the earth” Babylonian system of idolatrous, covetous, money making and getting by USURY!

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