What do you think is the biggest drag on our economy?
If you said “usury“, welcome to Club Classically Correct.
Usury is not, as so many would have you believe, the charging of an excessive rate of interest.
That is the modern definition. Banker approved.
The classical definition of usury is commonly attributed to Aristotle:
“There are two sorts of wealth-getting, as I have said; one is a part of household management, the other is retail trade: the former necessary and honorable, while that which consists in exchange is justly censured; for it is unnatural, and a mode by which men gain from one another. The most hated sort, and with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural object of it. For money was intended to be used in exchange, but not to increase at interest. And this term interest (tokos), which means the birth of money from money, is applied to the breeding of money because the offspring resembles the parent. Wherefore of any modes of getting wealth this is the most unnatural.”
– Aristotle, c. 350BC (Politics, Book I, Part X)
Today, our modern “money” system is the pinnacle of the money-lenders’ art.
Or should I say rather, the money-lenders’ “artifice”:
ar·ti·fice
[ahr-tuh-fis]
noun
1. a clever trick or stratagem; a cunning, crafty device or expedient; wile.
2. trickery; guile; craftiness.
3. cunning; ingenuity; inventiveness: a drawing-room comedy crafted with artifice and elegance.
4. a skillful or artful contrivance or expedient.
The vast majority (around 97%) of “money” is simply electronic digits.
Digital bookkeeping entries.
Created by the banking system, every time a person signs up for a new (or bigger) loan.
(See The World’s Most Immoral Institution Tells You How + Think You’ve Got Cash In The Bank? Think Again)
And here is the key to the usurers’ immense power and wealth. They have been given the exclusive rights not just to create this digital “money” in the form of debt that must be repaid. You have to pay back those digital bookkeeping entries with interest.
It is interest – usury – that is the biggest drag on our economy.
Consider this.
According to the ABS, the average size loan for a first home buyer in Australia reached an all-time high $293,900 in December 2012. A typical variable home loan rate right now is 5.6% – that’s with the RBA’s official interest rate at record “emergency” lows, mind you. According to ASIC’s “MoneySmart” online calculator, taking out such a loan right now, and repaying $2,000 a month for the next 20 years and 9 months, would result in your repaying the bank $203,598 in usury alone.
Of course, this assumes that interest rates did not rise in the next 20-something years. If (when) they do, then so too does the amount of usury you must repay to the bank.
Just the other day I was wondering, “Has anyone ever bothered to calculate the total value of one year’s worth of usury repayments, on all home loans in the Australian economy”?
To be frank, I have neither the skills nor the knowledge to make an accurate calculation.
But it is not hard to work out a very rough approximation. Something that helps give some idea of just what a drag on the economy the repayment of usury on the banks’ digital bookkeeping entries must be.
According to the RBA, at December 2012 the Australian banking system claimed a total $1.136 Trillion in residential loan “Assets”.
(Yes, that’s right. Your signature on a loan document, pledging yourself to decades of debt slavery to repay the bank their digits, is considered the bank’s “Asset”)
According to Canstar’s variable rate home loan comparison chart, a variable mortgage rate of around 5.6% would appear fairly typical right now.
So, as a very basic approximation, if the total value of all the banks’ mortgage “assets” at end December 2012 were on the variable rate of usury, thus earning the banks 5.6% p.a., then (ignoring compounding, which makes the total even higher) the banks’ would stand to earn $63.6 billion in usury on home loans in 2013.
Just imagine all the far better, more productive and valuable uses that much “money” could be put to in 2013 by Aussie households.
Now again, I stress my lack of knowledge on this data. For all I know, the value of expected usury repayments may already be included in the RBA’s total of banks’ mortgage “assets”.
If so, it matters very little. Even a mere 5.6% compound interest on >$1 Trillion in mortgage debts, is a huge annual sum.
Clearly, the drag on the economy from the burden of repaying usury to the bankers on home loans alone, is truly staggering. EPIC.
And when we consider that banks have done nothing to deserve this exclusive right to profit from our lifetime labours, the truth of Aristotle’s observation is only the more clear.
Of any modes of getting wealth, usury is indeed the most unnatural.
Barnaby Is Right 
No my friend, usury is not the problem. The problem is that Australians are living on borrowed money because politicians and business people have been flogging off the nation to foreigners for decades rather than develop and prosper from the wealth we have in this nation. Would you ever see Saudi Arabia flog off its oil fields? Off course not. But we have flogged off all of our wonderful LNG assets to overseas owners who will make untold fortunes in the future. And now our dumb politicians are flogging off freehold agricultural land which once sold is gone forever.
So expect the interest we pay to increase. When you own nothing you pay through the nose. It has always been that way and Australians will pay the price for permitting their politicians to plunder the nation.
This is retarded… without interest, who would lend money? without money to borrow, how would businesses grow? I really hope Joyce doesnt support this dribble…
Research time-value of money and opportunity cost and then rewrite this article.
h, suggest you read the linked articles, and/or do some in-depth research on the history of “money”. You are repeating the same tired myths and fallacies that have given us the system we have today.
The world has never been more prosperous than it is today. Compound interest has been one of the main drivers of the increase in real per capita wealth… Do you really believe than if no one borrowed any money and everyone handed everything on credit back, their houses, cars, medical equipment, all the stock in every department store, then we as a society would have a more valuable existence?
The world is vastly more heavily in debt than ever before. The so-called “prosperity” you speak of, has come at the cost of global debt servitude, with the “prosperity” gap between the majority of humanity and the uber-wealthy never more vast. Again, it is clear from your comments that you do not have even a basic understanding of what “money” is, or, how it is actually created. Hence, you are inadvertently repeating the same fallacies that have given us that situation. Please do some research before commenting again. EDIT: Try this for starters – Debt: The First 5,000 Years
I have a very strong grip on the concept of money. I also understand its history. I have noticed that nothing you say has answered any of my questions. What is the alternative? We give back borrowed money? We could give back anything that was created using debt. You could give back the computer your typing on because the components in that will all have been researched and developed using debt. This to me sounds retarded.
Borrowing beyond means is a problem. Having socialist unethical governments that buy votes by borrowing well beyond their means is a huge problem. Your argument shouldnt be with borrowed money, it should be with unsustainable borrowings. Please explain the alternative
There are numerous alternatives. Full public banking. Complementary currencies. My own proposal, which, if you had bothered to click and read the various linked articles before parrotting myths and fallacies, you would already be aware of. Until you are able to break beyond the closed-box thinking that insists there is no alternative to “money” and “interest” and “banks” (without actually looking and thinking first), then your input here only serves to perpetuate the banker-enriching status quo.
So to get rid of debt you want bigger governments?
Sigh.
Go away. Read. Think.
EDIT: Regular readers well know that I am about as far from being a Big Government advocate as it gets. Indeed, my own proposal for a replacement currency system eliminates the alleged “need” for government, and banks. So again, read, think, then come back with informed, relevant, intelligent comments.
Send me this link where I can get a summary of this new amazing system? I only meant that to sound sarcastic, I really do want to read it…
V. brief summary here. If you want the full essay, search for it on this site. Don’t expect to keep getting spoon fed… especially when you come on here hurling ignorant insults (“this is retarded”) at the author from the get-go.
So you want communism? haha I know you wont post this, just like the last one I wrote but, I honestly do believe what you have written here is retarded. I dont believe you understand how the economy works and what really drives the economy (incentives) and how stodgy governments become. I am also surprised by your reluctants to debate this topic. If it was public banking we would still be in the dark ages, god look at what they are already doing to our country.
Thanks for your insightful contribution. I’m sure all readers are enlightened and enriched by it.
Aside to this essay. We often hear that islamics do not charge interest ( usury) on their financial loans. It is forbidden in the koran. I recently read that they have started or are going to start a housing development in Sydney area. The financing method is to borrow $100,000 interest free and at the end of 3 years you pay back $130,000. To me that looks like 10% per year of interest (banks quoted 5.6%) Am I missing something/
As I understand it, you’re correct Geoff. Have read in many places that so-called “Sharia-compliant” finance has numerous work-arounds. For my part, I see that as further evidence of the need to educate everyone – that (per Aristotle) any device that results in “money” breeding “money” for someone’s benefit (profit), is unnatural. And immoral, in my opinion.