Thoughts on Usury
Usury is one of those things which is vaguely defined.
I'm not the pharisee that Michael Hoffman is who believes that any interest is usurious.
If you were to lend me $1,000 dollars interest free for a 10 year loan you would still feel a loss even if there was an absolute certainty that you would be made whole in 10 years. Money does have a present time value. Contra Hoffman not having a money on hand means you can't buy the tractor you need to plow the fields, or send your kid to college, or buy groceries for that matter irregardless of whether or not you are getting that money back in 10 years. I think its fair that this loss should be compensated for. I think charging for a profit probably isn't sinful.
It's hard to imagine the world we live in today without loans. commerce is highly specialized and loans are needed all the time to keep it going. Businesses need to buy things on credit, Cap-ex projects need to get funded, buying a house or a car is very costly. If you start a business you will need to take out loans. Hoffman and EMJ can handwave and say what they like, but without loans how are any of these things getting done? For instance: How is a plane manufacturer supposed to buy 100 of millions of dollars worth of parts when they wont be able to assemble and sell the airplanes from those parts for years?
I do think that fractional reserve banking is usurious. creating money through double entry bookkeeping is essentially robbery. Imagine there is only 100 dollars in a economy and it is used to buy a 100 things. If I have 10 dollars I can buy 10 things. Now a bank comes along and uses double entry bookkeeping to create 10 more dollars. Now there are 110 dollars for 100 things. Since I only have 10 dollars I can only buy 9 things with those dollars. Essentially what the bank did is it took 10 dollars away from everybody in the economy and loaned it to someone else. That's basically how banking works in the real world. Every time a bank issues a loan it is taking a small fraction of your money away from you.
The counter argument is always that those loans go into things which create wealth such as businesses and houses and so on and so forth, but moral issues aside its definitely not a 1:1 as inflation shows us.
This is the nature of double entry bookkeeping. So IIRC from accounting class Assets= liabilities + equity. So when a bank creates a loan, for lets say 10,000 dollars it splits it into an asset and a liability. Every payment on the loan pays interest and pays down the principal. The bank keeps the interest and the payments on the principle cancel out the assets and the liabilities until they zero out. The money that was created for the loan is "destroyed" but the money used to pay the interest on the loan is kept. Since money is primarily created by double entry bookkeeping loans what this means is that there is always more debt than there is money to service the debt and in order to service the debts new loans must always be created which are larger than the last loans. This means that asset prices must always go up as there must be a basis for the loans to be taken out. Over time due to the nature of compound interest there is simply too much debt, which leads to compounding debt (where debts enter a feedback loop where they become too difficult to repay and so debt has to be taken out to pay for debt.) This is called the long term debt cycle, and the only way out is a reset (hence the Schwabian term "Great Reset")
The thing about great resets is that there really are no good options. The bill is due and it can only be paid a couple ways. For instance our national debt is 38 Trillion and 1 trillion a year on interest payments.
We can either try to cut spending, but we would need to cut the governments budget by 2 trillion dollars a year for about 40 years.
Default on the debt, but this would mean wiping out savings for millions of investors, screwing over foreign countries, losing world reserve currency status, and maybe kicking off a couple wars.
Or inflate the currency and hope the economy grows fast enough to outrun the interest, not very likely.
As bad as the national debt is, the amount of private debt is even worse in this country. Nobody knows what the numbers truly are but if you figure that: the median home price is over 400,00o and most people are on 30 year loans, most people finance their cars, have credit cards, most corporations have lots of debts, most students take out student loan debts, and medical debts then it is likely 2-3 times higher than our national debt.