In today’s society the charging of interest seems to be nothing out of the ordinary. Reasons given may be:
- A bank must risk their hard earned capital on debtors who may not be able to pay back the principal.
- A bank has to use the interest charged on loans to pay the interest on savings accounts.
- A bank could be investing in other areas so they must charge us interest as a “usage fee”
However did you know that the charging of interest has been a hugely contentious issue and been debated over for centuries. Historically it was referred to as Usury.
Our world monetary system is debt based. 97% our money is created by banks as interest bearing loans (debt). The Bank of England admit that basically all money in existence is a debt! There is a not so obvious major fundamental flaw with this. For instance if a bank creates £100 and charges 10% per annum and wants it repaying in 1 year then the debtor requires £110. But how is the extra £10 repaid? Well it must come from another debt. However how is this second debt repaid? it to must come from another debt and so on ad infinitum! Therefore mathematically it is impossible to pay back all the debt even if all the vast reserves of money sitting in secret and offshore bank accounts were available. Our monetary system is dependent on nations, corporations and people borrowing and spending forever, in effect a giant pyramid scheme! Additionally if debt is not produced at a sufficient rate to service existing debt then this leads time and again to an economic crash. Debt will only ever increase unless it is written off.
The graph below illustrates the massive contradiction where supposedly the world has never been richer materially or financially in all of history but this is trumped by the fact we have never been in more debt either, approximately 300% World GDP! The US national debt is currently at $20 trillion, personal debt $18 trillion and corporate debt $8 trillion!
Imagine if you have a controlling stake in these banks, you make massive profits while the world economy is growing as interest payments are made. However in times of recession, which history indicates are inevitable and banks stop lending then as most loans are secured against assets they can take these over! People lose homes and businesses as they cannot pay back the interest on debts and nations made to implement “austerity measures”.
So banks make their profits from nations spending and consuming more this year than the previous. More commonly known as “economic growth”. Now in order for people to spend, money is required and this is derived from corporate income. However their income is reliant on people spending but they cannot spend without money. It’s the chicken and egg problem, what came first? Well in the distant past a few people on behalf of a nation borrowed money to go to war to set Capitalism up to control the spice, sugar, cotton, slave and other trades. The system of banks lending to capitalists was born and over a period of several hundred years violently spread all over the world. The world’s population has been paying back this debt ever since! In fact for several hundred years the main contributor to national debt was war, even now we spend huge amounts on it.
Servicing debt is a key factor in driving Capitalism! What does this actually mean? finite world resources are continually extracted, environmental habitats are destroyed, people have to produce more cash crops, clothing and other goods from far flung lands to provide for the consumers of the world (The 12 percent of the world’s population that lives in North America and Western Europe accounts for 60 percent of private consumption spending). This leads to masses of consumption waste that causes further environmental damage and potentially a source of human illness. It also leads to mass inequality where the majority of the world have to provide for the few (which are us in the west currently).
You cannot bypass this system as taxation is demanded in currency created by these banks and all human needs and wants are also denominated in this currency! It’s the fundamental reason why we must all work, to service personal, corporate and national debts. Our governments have demonstrated time after time they have no will in wrestling this power away from the financial elites. As I eluded to before when you read history they were the ones that passed Acts to set this system up in the first place. The charging of interest has allowed for massive wealth and time transfer to the financial elite, they care not for social responsibility or believe they should work (taint of trade) but simply enjoy the pleasures of life.
I hope I have logically shown how our monetary system collapses if we don’t continue to borrow and spend. How have they convinced us to spend? Well the recurring theme in corporate advertising is that true happiness is derived from the consumption of their produced goods and services. However once you realise how much pain and suffering is inflicted on people, animals and the environment as a result of this process, this simply cannot be the case. We as consumers especially in the West may find this very difficult to comprehend but try to imagine how difficult life would be if you could not pay your mortgage or a loan. This is the case for the vast majority of the world who have to borrow just to survive but don’t have the adequate income to service it or have to work in terrible conditions to have a chance. They are forced into becoming part of the capitalist process, for instance working in a sweat factory that produce the goods we buy and thereby forsaking traditional ways of living. I advocate a system where responsibility, sustainability and equality is at the very core. I am convinced this unseen debt slavery has been the fight for countless generations and will be for future ones unless we the people make a stand now!