Tag Archives: interest rates

Usury In Christ’s Kingdom?

9 Apr

Jesus+and+Wall+St

Our modern day Aussie crusader against the dangers of government debt, Senator Barnaby Joyce, makes no apology for his Catholic Christian upbringing and professed belief system.

As does Opposition Leader Tony Abbott, Shadow Treasurer Joe Hockey, Shadow Minister for Finance, Deregulation and Debt Reduction Andrew Robb, and Shadow Assistant Treasurer Mathias Cormann.

That’s the entire front line economic team of what looks likely to be Australia’s next Federal Government.

All self-professed Christians.

And yet, need any of us be left in wonder, even for a moment, just how each of them would respond to the following video, and to the question posed above.

For if ever there were a shining example of a CFZ – Conscience-Free Zone – then politics is it.

(h/t reader Kevin Moore)

See also:

A Tale Of Usury, Explosions, And A Used Car Salesman

16 Mar

used-car-salesman

Let me tell you a tale.

On a fine and sunny day this past week, your humble blogger accompanied his brother on a long journey.

To inspect a used car.

Having been reassured over the telephone by the salesman that this car – a premium brand convertible – was as-advertised in “excellent” condition, we embarked on our journey from the country to the Big City with my brother in high spirits. And myself in low expectations.

What we found in the Big City failed to live up to even my low expectations.

And yet, on the positive side, what we found may now serve the purpose of guiding you, dear reader, towards a better understanding of the negative impact of usury on our everyday lives.

Picture, if you will, a very small allotment of used cars, crammed mirror to mirror, in what must surely have been a low rent area on the outskirts of an outlying suburb. The sight of this site would have been enough to prompt your humble blogger to immediately turn around and drive away, had it not been for the innocent exuberance of his beloved brother, the budding buyer.

Prospects only sank the further on spotting the salesman and likely owner of this establishment, seated in the shade outside the hut which passed for an office. Perched on a stool, rotund beer gut resting on the table, his well-coiffed bouffant appropriately dyed rust red, talking earnestly on his mobile phone.

As my brother – a truly beautiful, innocent-in-the-ways-of-the-world fruit always ripe for the plucking – followed my advice to “Always go straight up to salesmen and state your purpose clearly, briefly, and confidently; don’t roam around aimlessly looking at stuff, waiting for them to size you up and plan their attack”, I walked to the front of the yard, where stood … actually, where slumped … the object of our long journey. Proudly positioned front and centre. The pinnacle, the most potent object of automotive desire that this particular dealership had to offer to the wandering eye of passing motorists.

Oh dear.

Not one body panel had escaped the telling sign of dents, scratches, or delaminating clear coat. The plastic rear window boasted an inconsistent, weak-piss shade of yellow discolouration, doubtless attained from many a long hour spent roasting beneath our sunny southern skies. The split seams and frayed stitching on the fabric roof loudly proclaimed their propensity to ingest any H2O that may fall in their immediate vicinity. And things only got worse from there.

Our aforementioned salesman approached, wide-eyed buyer in tow, car keys in hand. Having already questioned and confirmed that my brother “hasn’t had one of these before” – my alertly protective ears had overheard their conversation – he proceeded to inform him of a “unique safety feature”. One that “only these models” boast. Rust red-dyed bouffant then proceeded to demonstrate.

Inserting key in the lock, our beer-gutted new friend placed one pudgy paw upon the door, and gently pressed his not-inconsiderable body mass against it, while turning the key with the other.

Fail.

Try again. With rather less gentle application of body mass this time.

Win! We were in.

You see, extolled the salesman, most folks don’t know about this “safety feature”. Brilliantly, it renders the model less vulnerable to thieves, because most people don’t know how to open the door.

Groan.

I did mention that this was a premium brand automobile, did I not?

At this point, having taken but a single stroll around this four-wheeled (and mismatched-tyred) wonder, your humble blogger had seen and heard quite enough. His thoughts turned decisively to “Oh gawwwd!!! How can I get us the flock out of here, quickly, without hurting anyone’s feelings, or denting anyone’s pride?”

You see, my dear brother is, shall we say, a little socially inept. His still-innocent exuberance and enthusiasm for life and people – commonly manifested in an apparent belief in the good intentions of all strangers – typically overwhelms his negligible capacity to pick up on the many and varied non-verbal signals that are part and parcel of human interactions.

Nonetheless, I first tried the subtle, wordless communication medium of body language to convey my message to him.

Standing well aside from said vehicle, leaning against the flaking-painted post of the security fence protecting this yard-full of former automotive glories, spine stiffened, chest thrust out defiantly, arms folded, teeth clenched and jaw muscles twitching, exasperated expression writ large upon my darkened visage, and casting my gaze disinterestedly to yonder hills. The exasperation, it should be said, not wholly feigned, conscious as I was that such subtle signals would inevitably be overlooked by my excited brother with the pocketful of burning cash.

And why not overlook any negative signalling, indeed. After all, the tan leather interior was plush!

That, by the way, is the best thing that can be said of this particular automobile. The tan leather was plush. And remarkably, at a cursory glance, in reasonably good condition. Though not sufficiently so as to distract the discerning eye from immediately noting other significant interior features. Such as the two large, prominent, non-OEM holes in the driver’s door trim. And the numerous zip ties, struggling in vain to hold the roof lining in the position of the manufacturer’s original intent.

Having failed to catch my brother’s attention, I stepped it up. By stepping out. I spent the next minutes – which of course, seemed like hours – wandering off around the yard, arms still crossed and facial expression now transformed into a disinterested annoyance. But to no avail. Indeed, the fun had only just begun.

I gave up on sending the “disinterested wandering” signal and returned to the scene of the crime. How much of a crime we were only now set to discover. The salesman – given the size of the establishment, a sole trader would be my guess – kindly demonstrated the vehicle brand’s most famous attribute. The engine.

Now, you might reasonably be forgiven for expecting an automobile wearing the badge of this particular marque to respond to a turning of the ignition key in a manner rather like that we expect on flicking a light switch. And then, to convey a smoothness of sound and motion rather like that of a sewing machine.

Er… no.

Not to belabour the point – unlike the battery, which was most certainly belaboured – eventually the engine did burst into life. Most of it, anyway. What was immediately apparent, is that at least one cylinder was no longer responding to the spark of life. As evidenced by the engine note. And by the knocking noises. And by a significant rocking side-to-side of the engine, one that was sufficiently in excess of that which the engine mounts had been designed to absorb, that the entire car adopted a most determined lateral gyration in sympathy. Unlike the door locks, apparently this was not a “unique feature” of this particular model. Unless, that is, our now somewhat less enthusiastic-looking salesman simply forgot to mention it.

I do not know if his decidedly less eager expression can be attributed to his having picked up on my oh so subtle body language, or, to the less than encouraging response from his motor. In any event, he clambered clumsily out of the driver’s seat to come around and peer (un)knowingly into the engine bay.

Through the passenger window, I caught my brother’s eye. And rolled mine. Judging from his downcast glance in return, happily, it appeared that my brother too, had belatedly reached a similar conclusion. If not, then the events of the next few moments certainly did successfully transmit the “This is a sh!tbox, let’s leave NOW!!” signal that my own efforts had heretofore failed to do.

Bravely, my brother – who was now ensconced in the plush tan leather of the driver’s seat – tried gently pressing the accelerator. No doubt in a hopeful attempt to “clear its throat”.

The engine stalled.

He turned the key, and prodded the accelerator. Ever so briefly, the engine again sprang to life. And then…

BANG!!!

A very large volume of smoke belched from beneath the engine covers, and mushroomed out into the afternoon sunshine in a manner reminiscent of an atomic explosion. Seated inside the vehicle, my brother was quickly enveloped by a rush of acrid smoke billowing from every orifice in the dashboard.

Quickly escaping the fumes, he informed the salesman that the engine diagnostic warning light was on. Visibly straining to not appear crestfallen, the salesman went through the motions of checking the dashboard light for himself, and then flailing in vain with his rhetorical whip at a now quite dead horse, by quaveringly insisting: “That’s normal, it will go out soon”. After waiting for the interior smoke to clear, he climbed in and engaged the battery and starter motor in a futile struggle to revive the engine of this, the pride of his fleet.

With the salesman earnestly preoccupied and my brother out of the car, I seized the opportunity. Leaning over with a polite-but-firm “Thanks for your time”, I turned to my brother with a steely expression and a flick of the eyes towards our own car, grabbed him by the shoulder … and bolted.

Before my brother had a chance to reengage a pointless conversation.

And before anything else could happen that might cause that poor man’s dignity to melt away entirely, and join company with the other sad stains in the carpet.

I leave you, gentle reader, to imagine the conversation that ensued during the first minutes of our long journey home.

********

Given a little more time for emotions to settle and calm to return, as the kilometers rolled by beneath our wheels and the wind whispered quietly about our windows, I began to reflect on our experience.

And the longer I reflected, the more my feelings altered.

Instead of anger, or annoyance, or disgust, or contempt, I began to feel a great empathy with, and sadness for, that poor fellow soul.

An (other) Aussie brother.

Trying desperately to flog that complete heap of sh!t iron horse. Which had now suffered an apparently terminal myocardial infarction.

After all, what is he really doing, but that which we are all doing?

Just trying to get by.

Or is that, to “get buy”.

To pay the bills.

To feed the family.

To get ahead. Whatever that means.

Doing whatever we can, within and often beyond our personal limits – physically, mentally, spiritually, and morally – to take care of those whom we are closest to, and naturally love the most.

“Me and mine”.

I do not know anything of that used car salesman’s circumstances. His education and skills, or the limits thereof. The size and scale of the difficulties and stumbling blocks in his life’s journey. The pressure he feels to deliver.  Who am I to judge that poor soul, to feel affronted, or to criticise his means-to-an-end?

I reflected on the fact that there are so many in our world in not dissimilar circumstances.  Who find themselves resorting to not dissimilar actions, in order to “get buy”.  Indeed, this is in truth hardly a tale of woe at all, when one pauses to consider the plight of many 100’s of thousands of our brothers and sisters right here in our own “advanced” economy.  Not to mention the billions of others who are born into even less … “fortunate” … circumstances, and are right now living and dying just across the seas from our “Lucky Country”.

I was reminded of a short story that is recounted in a book that I have only just received and begun to read. It is called Rethinking Money: How New Currencies Turn Scarcity Into Prosperity.”

The story appears in an early chapter titled, “A Fate Worse Than Debt – Interest’s Hidden Consequences”. As it explains a subject that is very close to my heart with a style and a clarity far better than I could ever attain, I would like to share that story with you now (emphasis added):

The small village was bustling with locals proudly displaying their wares, chickens, eggs, cheeses, and bread as they entered into the time-honored ritual of negotiations and trade for what they needed. At harvests, or whenever someone’s barn needed repair after a storm, the village-dwellers simply exercised another age-old tradition of helping one another, knowing that if they themselves had a problem one day, others would come to their aid in turn. No coins ever changed hands.

One market day, a stranger with shiny black shoes and an elegant white hat came by and observed with a knowing smile. When one farmer who wanted a big ham ran around to corral the six chickens needed in exchange, the stranger could not refrain from laughing. “Poor people,” he said, “so primitive.”

Overhearing this, a farmer’s wife challenged him: “Do you think you can do a better job handling chickens?”

The stranger responded: “Chickens, no. But, I do know a way to eliminate the hassles. Bring me one large cowhide and gather the families. There’s a better way.”

As requested, the families gathered, and the stranger took the cowhide, cut perfect leather rounds and put an elaborate stamp on each. He then gave ten rounds to every family, stating that each one represented the value of a chicken. “Now you can trade and bargain with the rounds instead of those unwieldy chickens.”

It seemed to make sense, and everybody was quite impressed.

“One more thing,” the stranger added. “In one year’s time, I’ll return and I want all the families to bring me back an extra round – an eleventh round. That eleventh round is a token of appreciation for the improvements I made possible in your lives.”

“But where will that round come from?” asked another woman.

“You’ll see,” said the stranger with a knowing look.

A year passes and on another market day the stranger with the stylish hat returns, and from his vantage point he observes the village below. While sitting under the broad-limbed oak tree, he reaches into his knapsack and pulls out a silver canteen filled with single-malt whiskey, takes a swig, savoring the peaty warmth at the back of his throat, and waits for the village folk to file past him with each family’s repayment of the eleventh round.

Below on the village outskirts, a family begs for alms, having lost everything in a fire. Focused on their obligations, the villagers pass by without as much as a glance.

The eleventh round is a very simplified illustration of an important principle regarding money. The point of the anecdote is that, with all other things being equal, the competition to obtain the money necessary to pay the interest is structurally embedded in the current money system. Somebody will have to be without the eleventh round for payment for somebody else to have it and make the interest payment.

So how does a loan, whose interest is not created, get repaid?

Essentially, to pay back interest on a loan requires using someone else’s principal [Note: that principal is also debt, owing interest in turn]. In other words, not creating the money to pay interest is the device used to generate the scarcity necessary for a bank-debt monetary system to function. It forces people to compete with each other for money that was never created, and it penalizes them with bankruptcy should they not succeed. When a bank checks a customer’s creditworthiness, it is really verifying his or her ability to compete successfully against the other players – that is to say, assessing the customer’s ability to extract from others the money that is required to reimburse the interest payment. One is obliged in the current monetary system to incur debt and compete with others in order to perform exchanges and pay the resulting interest to the banks and lenders.

In a manner of speaking, it’s like a game of musical chairs in that there are never enough seats for everyone. Someone will end up getting squeezed out. There isn’t enough money to pay the interest on all the loans, just like the missing chair. Both are highly competitive games. In the money game, however, the stakes are elevated, as it means grappling with certain poverty or, worse still, having to declare bankruptcy.

Those billions of our brothers and sisters living in poverty and hardship around the world?

These are the families who have been forced to beg for alms on the outskirts of our global village. While the rest of us – focused as we are on our obligations, on the ceaseless struggle of competing for money – we daily pass them by, with neither a thought nor a glance, as we make our way to pay the usurers.

If, like me, you have ever pondered the reasons why people nowadays seem to be even more materialistic than in times past; why the business of doing business seems more cut-throat and profit-driven than ever; why advertising and marketing are seemingly all-pervasive and more aggressive than ever; why there are seemingly so many more, varied, and greater ills in the world than, say, 50 or 100 years ago – poverty, wealth and income inequality, “-ism’s”, dishonesty, disrespect, dishonour, amorality, fraud, corruption, drug and alcohol abuse, pharmaceutical dependency, and increasing physical, mental, and spiritual violence – then I hope you may now begin to see that here is a – and quite possibly the – major culprit.

Usury.

It is a prime cause of slowly but surely, devolving mankind. Of causing us to increasingly behave like … indeed, often much worse than … mere animals.

Just to “get buy”.

Here is a final thought for you to ponder.

It hails from a section of the above chapter, and is sub-titled “Compulsory Growth Pressure”. It concerns the direct relationship between our 300 year-old, central-banking driven, usury-based debt-money system, and the global obsession with economic “growth” that is often (and rightly) blamed for all manner of social and environmental ills.  For those readers who may hold concerns about climate change, natural resource depletion, environmental degradation and pollution, or similar ecological anxieties, please pay close attention (italics in original):

Interest… has hidden dynamics that result in detrimental costs not only to personal relationships, commerce, and society at large, but also to the sustainability of our fragile planetary home, Earth. The effects are so well-concealed, in addition to being so deeply embedded in the money system, that they go, for the most part, unnoticed.

Debt-based money requires endless growth because borrowers must find additional money to pay back the interest on their debt. For the better-rated debtors (e.g., in normal times, government debt), the interest is simply covered through additional debt, resulting in compound interest: paying interest on interest. Compound interest implies exponential growth in the long run, something mathematically impossible in a finite world.

…the exponential growth of money through interest rates has shattering real-life consequences in which entire nations of people are marginalized and stuck in debt forever. For instance, after a G8 summit former President Obasanjo of Nigeria stated: “All that we had borrowed up to 1985 or 1986 was around $5 billion and we have paid back so far about $16 billion. Yet, we are being told that we still owe about $28 billion. That $28 billion came about because of the foreign creditor’s interest rates. If you ask me, ‘What is the worst thing in the world,’ I will say, ‘It is compound interest.'”

See also –

A History Of The Legal Case Against Usury

24 Feb
Schistosoma_mansoni2

Schistosoma mansoni is an endoparasite that lives in human blood vessels.

Regular readers will know that I am an ardent opponent of the practice of usury.

In the classical meaning of the word.

Indeed, it is my view that the practice of usury is The Key to the power of the money-lenders.

While many others have argued that the key to their power is their exclusive right to create money (debt) whenever they make a loan, I tend to disagree.

In the absence of the legal right to charge interest (usury) on those loans, the money-lenders’ power would be effectively nobbled.

They could be replaced by full public banking. Or by alternate, free currency solutions like my own.

This key issue of the charging of interest on “money” lending, its origins, and its legal history, is awash with myths, theories, distortions, and outright falsehoods.

There are many eloquent and brilliant advocates for the alleged “need” for the charging (and offering) of a rate of usury on money. The theory of the so-called “time-value of money” is commonly cited in justification of what is, in truth, plain and simple parasitism –

Parasitism is a non-mutual relationship between organisms of different species where one organism, the parasite, benefits at the expense of the other, the host.

First used in English 1539, the word parasite comes from the Medieval French parasite, from the Latin parasitus, the latinisation of the Greek παράσιτος (parasitos), “one who eats at the table of another” and that from παρά (para), “beside, by” + σῖτος (sitos), “wheat”. Coined in English in 1611, the word parasitism comes from the Greek παρά (para) + σιτισμός (sitismos) “feeding, fattening.”

What I hope to do in today’s post is dispel some of the banking industry’s most powerful falsehoods.  That the charging (and offering) of “interest” on money is normal. That, at worst, it is a “necessary evil”.  That it is really something natural, and good, like a law of the universe, and vital to keeping our world turning.

I also hope to encourage readers to STOP using the banksters’ language.

And instead, to “call each thing by its right name.”

The original word used for the charging of interest on money … is USURY.

Usury does not mean charging “excessive” rates of interest.

The etymology of the word “usury” shows that it originally meant the charging of any interest, at all:

usury (n.)

c.1300, from Medieval Latin usuria, from Latin usura “usury, interest,” from usus, from stem of uti (see use (v.)). Originally the practice of lending money at interest, later, at excessive rates of interest.

How very convenient for the modern day money-lenders, that we have changed our language over the centuries.

No doubt with more than a little help from our “friends”.

In researching for more information on the origins of the word “usury”, recently I happened across an article published in the American Bar Association Journal, Volume 51, September 1965. It was written by a J.L. Bernstein, NYU Law School graduate and editor-in-chief of the New York State Bar journal. Following are some extended excerpts. It really is fascinating stuff.

But if you are tempted to leave before finishing, please do me one favour. Skip to the end, and read my closing observations concerning ancient Sumeria, the true origin of debt jubilees and New Year’s Eve celebrations, and the deeper meaning behind the Biblical story of Abraham.

Now, to the history of the legal case against usury (my bold emphasis added):

Background of a Gray Area in Law: The Checkered Career of Usury

Tracing the ancient and medieval history and development of usury, Mr Bernstein shows that at first it was any charge for the use of property, but later became only the charge of excessive interest on money. With the advent of our present consumer society, various procedures and methods of conditional selling have enabled what might otherwise be usury to escape illegality. It is time, the author suggests, to delineate what is fact and what is fiction in this shadowy world.

A CASE MAY BE MADE for usury as one of the oldest professions of man, yet the complexities of modern economic life “make fundamental a review” of the problem, as the late C.S. Lewis, Oxford and Cambridge don, scholar and theologian pointed out. The checkered career of usury cum interest is too long to detail here, but this mixed question of theology and law has always been a gray area for the courts – a veritable hodgepodge of legal decision, as this Journal once put it, with “no clearcut rationale”.

Even an elementary statement in a leading New Jersey case is questionable. The Supreme Court said: “Although the common law did not prohibit usurious exactions, our statutes have done so since 1738.” This view of the common law is challenged in Mark Ord’s authoritative Essay on the Law of Usury (1809), which states: “Usury in its strict and legal sense was always considered unlawful.” Likewise, Robert Buckley Comyn says: “Usury was in England an object of hatred and legal animadversion at least as early as the time of Alfred; and Glanville, Fleta, and Bracton bear ample testimony to the abhorrence in which it was held.”

All Interest Once Was Usury

At common law a usurious contract could not be enforced, and usury appears to have been an indictable offense, the punishment for it being fines and imprisonment. The fact is that from the earliest recorded times until the later Middle Ages even interest was forbidden by both canon and civil law, for interest then was synonymous with usury. Indeed, interest had no significant usage in English law until the statute of 21 Jac. 1, c. 17 (1624), although it had been employed in commerce, having been adapted from the Justinian Code of the Roman Empire.

The Lombard merchants, the principal moneylenders of medieval times, had made it a practice to charge a penalty on default, and the custom spread. Thus interest was not a charge for the use of money, but an exaction to make the creditor “whole”. In time it came to mean permissible usury, but it is noteworthy that neither the Old nor the New Testament recognizes this concept, except for the new Catholic edition of the Holy Bible (1954) which substitutes interest for usury and banker for exchanger.

Comyn describes the gradual transformation: “Usury was an offense which having first become odious from religious prejudices, at length became the object of political consideration, and parliamentary restraint. And as at first the taking of any profit upon money was denominated usury, so afterwards, when such profit was authorized by law, the profit was termed interest, and the illegal excess alone retained the odious name.” Thus usury began as malum in se, but at least from the time of Charlemagne in the ninth century (he considered all profit as “filthy lucre”), the secular arm had sought to reinforce the spiritual, making it also malum prohibitum. Speaking of the earliest English statutes, those of Henry VII (1487-1495), Coke declared that all usury was “damned and prohibited”. According to an ancient book of the Exchequer, entitled Magister et Tiburiensis, usury was ranked with murder as an offense.

But the general detestation was diminished by 37 Hen. 8, c. 9 (1545) which, while entitled “A Bill Against Usury”, tacitly legalized it to a maximum of 10 per cent per annum. This statute inaugurated the serviceable fiction that usury no longer meant any interest, but only excessive interest. As Ord puts it, this was the first English statute to “give any connivance to the practice of lending at interest”.

The statute still called usury “a thing unlawful”; it was an attempt at moderation, following the lead of the church. Earlier attempts to ban all interest had failed ignobly, but so did this new approach, and by 5 & 6 Edward 6, c. 20 (1552), repeal made interest and usury one and the same again. But this didn’t work, as before, and 13 Eliz. 1, c. 8 (1571) repealed the Edwardian edicts and revived the statute of Henry VIII. In order, 21 Jac. 1, c. 17 (1624); 12 Car. 2, c. 13 (1660); and 12 Anne, c. 16 (1713), toyed mainly with the rates, which went from a maximum of 10, to 8, to 6 and finally to 5 per cent in the statue of Anne of 1713. This is the one followed in this country. But the most common maximum rate of 6 per cent is derived from the Justinian Code.

The statute of 12 Anne, which served as a common model here, was abrogated 110 years ago in England by 17 & 18 Vict., c. 90 (1854). Therefore, the mother country has no general usury law today and interest of 48 per cent may be quite legal – even more, if the courts can be convinced. As H. Shields Rose puts it in his book, The Churches and Usury (1908), this was “the final capitulation of the state … as regards the maintenance of a legal maximum rate of interest in England”.

Note:  The abrogation of this 183-year-old English law placing limits on the charging of interest, came just ten years after the privately-owned Bank of England was granted exclusive power to issue the nation’s banknotes (Bank Charter Act, 1844). Coincidence? I think not.

The etymology of usury is from the Latin words usa and aera, meaning “the use of money”. But both by ecclesiastical and civil law it was always held that usury could exist in nonpecuniary transactions as well. Many state statutes, following the language of 12 Anne, speak generally of “money, wares, merchandise, goods and chattels”. The Bible is more inclusive: “Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury.”

But courts that maintain that usury was not prohibited by the common law are on firmer ground if they mean thereby the common law as it was interpreted by the colonial judges here. Blackstone says that the common law of England consists of “That ancient collection of unwritten maxims and customs …”. Our early courts seemed to regard English authority on the subject so dubious, indifferent or contradictory that, without legislative enactment, anything by way of usury was legal. This led to such abuses that the colonists petitioned for action, and general usury statutes were adopted everywhere.

It is useless to deny that confusion abounded in the common law, for usury was no less a gray area and a hodgepodge of thinking then. Coke, for example, said that: “All usury is not only against the law of God [but] the laws of the realm, and against the law of nature.” But on another occasion he avers that what was actually forbidden was “biting usury”, i.e., unconscionable charges…

Note: It is your humble blogger’s firm opinion that, in a technological age where 97% of all “money” is no more than electronic binary code, mere digital bookkeeping entries, created at the click of a bankers’ mouse in the form of new debt, there is no question that ALL usury charges are unconscionable.

Genesis of the Problem Is of Ancient Origin

But if the common law is no less a puzzle than our decisional law, the trouble goes far back – to Holy Writ itself. Until the later Middle Ages all interest was interdicted, for it was abhorrent that money – “barren” as Aristotle and the inspired writers of the early Church had taught – should increase unnaturally while lying fallow. That a lender should profit in his own idleness and that a borrower should be charged even though he may have lost money in the transaction, both were intolerable. Indeed, the worst form of usury in medieval times is considered a most respectable practice in our own. This was the custom of paying interest from the day of the loan. Banks today not only pay interest “from the date of deposit”, but even from before, so that money deposited by the fifteenth of a month will draw interest from the first.

Note how the author first refers to “paying interest from the day of the loan”, then immediately switches gears to speak of banks paying interest “from the day of deposit”? This is a classic and oh so subtle mind trick, commonly used in justification of the practice of charging interest on lending. How so? By redirecting the focus of the argument on the fact that banks pay interest as well.  It is a clever distraction, because what is overlooked, is that banks never pay more interest than they charge. As a so-called “intermediary” in the payments system of the economy, the banks achieve the easiest of profits.  Not just because they charge more interest than they pay, which in itself would be a form of parasitism. But because they are not mere intermediaries – banks are able to create money (debt), and charge interest on it.  Contrary to popular belief, banks do not simply lend out money deposited by other customers. See The World’s Most Immoral Institution Tells You How

We have come a long way in our view of the fertility of money. But, oddly, the statute of James I, which gave the word interest its first significance in Anglo-Saxon law, contained the proviso that “… no words in this statute contained shall be construed or expounded to allow a practice [of charging interest] in point of religion or conscience”. But what did morality actually hold? That is the most vexatious of all inquiries.

The Fifteenth Psalm is clear without cavil: “Lord, who shall abide in thy tabernacle? Who shall dwell in thy holy hill … He that putteth not out his money to usury…”. Throughout the Bible the angry prophets denounce what the early theologians called “horrible and damnable sinne”. But there are also loopholes born of contradiction, and the frustrations of the moralists came to be visited upon the jurists.

Although the quoted passage from Deuteronomy forbids all usury, the next verse is most tantalizing: “Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury…”. What does this mean?

Indeed. There is much that can be said, and much evidence raised, in answer to that question.  But we will leave that particular controversy for another time.

From Biblical times until the later Middle Ages, a moneylender was simply a usurer, and a banker an exchanger. The distinction of moderate usury, called interest, received no recognition in the Church until after the Reformation. In a sense, therefore, the liberalization of religious thought also marked the turn to the “Money Society”, in which the medium of exchange achieved the status of a commodity of intrinsic value and became the lifeblood of commerce. The burgeoning materialism of the age, trading on the discovery of the New World, was in a mood no longer to tolerate philosophical and religious thought treating money as “infertile” and profit from it as “unnatural”, since it was not endowed by God or nature “with genital and procreative faculties” in the words of St. Basil (fourth century). In the end, it was the lawgiver, Justinian, who prevailed, rather than the philosophers and theologians.

And there you have it. What has ultimately prevailed with respect to usury, is the code of man. The Corpus Juris Civilis of the “lawgiver”, Justinian, a ruler of the late Roman Empire (c. 529AD), are the foundational documents of the Western legal tradition. It is ancient Roman law that serves as legal justification for the resurrected, and globally-dominating practice of usury in our day.

Theory of Moderate Usury or Interest Is Approved

This same logic, that there is nothing immoral about usury, was advanced in Parliament in the last century during the debates on the proposed abolition of the general usury statute of 12 Anne. “God did not so hate it, that he utterly forbade it”, contended one member; while another stated: “He could not have desired that the ban against all usury should be of moral and universal application”, for the Bible did not so clearly provide. An economist with the United States Treasury Department even advanced the view that usury could be traced “to the Creator Himself”, who first caused “all things to grow and increase”.

Nevertheless, that the total prohibition of all interest was at the center of canonist doctrine until the later Middle Ages is clear. “Not until sixteen hundred years after Christ did interest find any defenders”, proclaimed Roger Fenton. Then it was the Church which led the way to its acceptance, and the State which followed. Two principal reasons may be advanced for it: (1) the growing power of economic forces which chafed under enforced unselfishness and (2) the equivocations of Scriptures which encouraged the casuistries of “permissible instances”. Ultimately, perhaps, it was a hopeless struggle against human cupidity, or maybe only against “progress” for it is unlikely that, no matter what position it assumed, the Church could have stemmed the tide that was running.

Assailed on either side by those who, like St. Basil, called usury “the last pitch of inhumanity” and those who found it out of harmony with the facts of life, the Church sought to steer a middle course. Since its primary object has always been to protect the weak against the economically strong, it saw justifications for exceptions in commercial transactions between sophisticated parties.

“Sophisticated” parties? Now where have we heard that justification used more recently?

Moreover, on the allegation that, after 16 centuries, the Church succumbed to the pressures of economic greed and “progress”, it behooves one to point out that, in doing so, its ecclesiastical leaders and learned theologians all managed to lose sight of the simplest teachings of their own namesake, The Christ: 

“No one can serve two masters: Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve God and money.”

It is this blogger’s view that the vast, unfathomable wealth of “the Church” – the sheer obscenity of which induced a sense of nausea on his sole tour of the Vatican – stands as ample testimony to the identity of which “master” it has long chosen to serve.

“Interest”, laconically comments Roger Fenton, “is the brat of commerce.” By what Mark Twain would have called “theological gymnastics” the Church has been charged with acquiescing in contrivances and subterfuges; and its capitulation to usury – limited or otherwise – has been held to constitute a virtual abdication of the precept against avarice, a former “venal” sin.

The Church first approved the idea of interest as it originated in the Justinian Code, which implied a justified penalty on default, although it is likely that this in itself was a subterfuge to avoid the ban against usury. But theological approval of the dammum emergens, for actual loss incurred, was not satisfactory to business or its lawyers, who argued also for the lucrum cessans, certain gain lost. This the Church resisted for at least a century more, for it was not ready to concede that money, the love of which is “the root of all evil” in the Bible, was fertile. But in time it acceded to this, provided that the money was lent for an initial gratis period. Thus, technically, the interest was still not for the use of money, but as compensation for its nonreturn on the due date.

This attempt at charity led to an ingenious evasion. The grace period, accepted with high good humor in the market place, became a mere sham. The lenders merely fixed a due date so close that borrowers could not hope to repay by then, following which huge penalties were added. The evasion and the practice survive to this day, and the courts commonly enforce, after default, a rate of charge in excess of that permitted by general usury laws. It persists in “revolving” or “flexible” charge accounts, in which no charge is made if a bill is paid within ten days or so, after which interest (called a “service charge”) of 18 per cent is added.

But the Church never approved of lending to the poor in order to profit from their poverty, nor of such things as “consumer’s loans”, formerly called “consumptive loans”, a rather more descriptive phrase. Indeed, to lend for any but productive purposes or to engage in commerce except as a service to the community was still immoral. In 1515 the Lateran Council pronounced: “This is the proper interpretation of usury, when gain is sought to be acquired from the use of a thing not in itself fruitful, without labor, expense or risk, on the part of the lender.” The element of risk loomed larger in importance, but the Church having made distinctions, it was not long before the law of England followed suit. Within thirty years, in 1545, came 37 Hen. 8, the first statute to legalize moderate usury.

Today it is commonly argued that the charging of interest on loans simply represents a fair and reasonable “rate of return” to moneylenders, to compensate them for their “risk” in making the loan.

This is self-serving bunkum.

As we have seen previously, there is no labor or “risk” involved in the modern process of “money” creation and lending. It is simply typed into existence, as a new digital bookkeeping entry. And even when the moneylenders take their money debt-creation schemes to stratospheric levels, blowing asset bubbles that lead to the total insolvency not just of millions of common people, but of their own institutions – (eg) the predatory mortgage lending practices in the USA preceding the GFC – the government conspires with the bankers to make them “whole” again. In the modern era, it is perfectly clear and beyond refutation that the lending of money by the banking system is risk-free … for the bankers.

In closing this post on usury, there is one more piece of research I’d like to share.

Biblically-literate readers will be familiar with the story of Abraham. As the man chosen by God to be “the father of many nations”, he is a central figure in the history of three powerful world faiths and their billions of adherents. Indeed, they are named after him – the “Abrahamic” faiths of Christianity, Islam, and Judaism.

In the Genesis 11-12 account of Abraham, we learn that he lived in the region of ancient Sumeria (or Babylonia), in a place called “Ur of the Chaldees”. God told him to get out of Ur, and to go to a land that He would show him.

The Promised Land.

A metaphor for Heaven.

In David Graeber’s masterful work Debt: The First 5,000 Years, we learn a wealth of fascinating, myth-busting information on the true anthropological history of money, exchange, barter, and debt throughout recorded history. It is a “must read” book.

Many of us would be aware that the earliest written records of humankind are the clay tablet (cuneiform) writings from ancient Sumeria. The concept of a debt jubilee now being revived by Professor Steve Keen has its earliest origins in Sumeria/Babylonia, where actual “money” (eg, coins) was very little used; instead, the economy functioned almost entirely on a system of debts and credits, which (like today) were nothing more than bookkeeping entries, written originally on clay balls, later, on clay slates. The phrase “a clean slate”, meaning to have a fresh start or new beginning, has its origins here. New Year’s Eve celebrations also have their origins here – it was not uncommon practice for Sumerian kings to declare all debts annulled, to destroy all the records of debt and so begin with “a clean slate” in the new year; a cause for joyous celebration if ever there was one!

CunEnv

In chapter 7 of Graeber’s book, we also discover the meaning of the word “Ur,” from an early Sumerian dictionary:

ur (HAR): n, liver; spleen; heart; soul; bulk; main body; foundation; loan; obligation; interest; surplus; profit; interest-bearing debt; repayment; slavewoman.

I think there may well be a significance to the story of Abraham and his journey out of Ur to the Land of Promise, that is both far deeper, and far more practical, than most give it credit for.

The Biggest Drag On Our Economy

20 Feb

ball-and-chain

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.

One Chart Debunks Wayne’s Lies On Interest Rates

20 Feb
Click to enlarge

Click to enlarge

Treasurer Wayne Swan has never tired of telling the Australian people that interest rate cuts are a sign of the government’s good economic management:

Dec 4, 2012 – Treasurer Wayne Swan says the central bank’s decision to cut the cash interest rate follows the federal government’s prudent management…

“Today’s rate cut from the Reserve Bank is the early Christmas present that hard-working Aussies deserve,” Mr Swan told reporters in Canberra.

“We’ve now had the equivalent of seven rate cuts over the past year and of course that’s been made possible by the government’s economic management, strong budget management and of course, contained inflation.”

I could include many more examples. Except there would be no point. If you have heard Swan making these self-congratulatory noises once, you have heard it many times.

The truth, of course, is completely different.

When interest rates are cut, it is not a sign of good economic management.

It is a warning sign that things are going to poo:

Dec 4, 2012 – The Reserve Bank has cut the cash rate to its lowest level since the global financial crisis, following a raft of weak economic data that showed pessimism in the jobs market, a slowdown in mining activity and lower-than-expected retail sales.

The RBA cut the cash rate by 25 basis points, or 0.25 percentage points, to 3 per cent, which is the lowest the rate has been since the central bank started setting rates in 1990.

It matches the setting in April 2009 at the peak of the GFC, when the global financial system was in meltdown and the RBA was trying to prevent Australia slipping into recession.

That’s right. It is the important fact that Wayne and the rest of the Labor Party are conveniently forgetting to mention. The present official interest rate is deemed by the RBA to be an “emergency low”.

Take another look at the chart above.

See that little bump up, brief plateau, then fall in interest rates following the big GFC cliff dive?

Technical chart analysts call that a “dead cat bounce”.

2010-314--political-party-dead-cat-bounce-

Now, lest any reader think to accuse your humble blogger of partisan bias against Wayne and the ALP, let us not forget the LP’s history of lying on this topic.

Many will recall John Howard’s claim that “interest rates will always be lower under a Coalition government than under a Labor government”.

Think about this.

If that were true – and the chart above proves it is not – then what Howard was really saying is that “the economy will always be weaker under a Coalition government than under a Labor government”.

The usury rate formula is very simple to understand.

When the economy is strong, the vested usurers raise usury rates, to increase their profits.

When the economy is weak, they reduce usury rates, to “support the economy”. That is, to prevent their Ponzi scheme from imploding.

When interest rates are falling, it is not a great time to take out a loan. Despite what the vested usurers and their many mouthpieces in the media and real estate sales industry tell you.

It is arguably the worst time to take out a loan.

It is a warning sign that the economy is weak. That unemployment is likely to rise. That your job may be at risk in coming months.

And that the vested usurers are on the back foot, trying to prop up their Ponzi scheme.

DON’T BORROW NOW!!

 

Bob’s No Mad Katter On RBA “Independence”

18 Dec

Well well well.

No sooner do I finish writing a blog that includes a positive mention and empirically-supported defence of the so-called “protectionist” trade views of Senator Joyce and “Mad” Bob Katter, and lo and behold, I read this headline (emphasis added):

RBA should lower rate or be sacked: Katter

Outspoken Queensland MP Bob Katter says if his new political party were ever to win power federally it would force the Reserve Bank to lower interest rates – even if that meant heads had to roll.

Katter’s Australian Party (KAP), which was registered in late September, wants to devalue the Australian dollar by reducing interest rates.

The party’s policy platform states that the official cash rate should be brought into line with the rest of the world at between one and two per cent.

The Reserve Bank of Australia (RBA) cash rate is currently 4.25 per cent.

Addressing the party faithful on the Gold Coast this week, Mr Katter made it clear that if the Reserve refused to play ball board members would be removed individually or the entire bank “replaced with another body”.

“I don’t want to be advocating political involvement in the Reserve Bank,” the party’s founder told AAP on Saturday.

“But its independence doesn’t extend to the government of Australia abrogating its responsibilities to control the economy.”

Mr Katter said the RBA was using interest rates to control inflation but it wasn’t an effective tool.

Further, Australia didn’t have a problem with inflation, he said.

“Even if it did, it would be infinitely more important to rescue every single industry in Australia – tourism, manufacturing, agriculture and mining.”

The federal member for Kennedy said the high Australian dollar was “murdering” tourism particularly on the Gold Coast.

He noted that Europe currently has interest rates around one per cent while the United States is at 0.25 per cent and Japan zero.

“We are 500 per cent out of step with the rest of the world,” he said.

“There has been a protracted attitude over a quarter of a century that has been diabolical for this country.”

A Katter-led government would request the Reserve to lower the official cash rate and if if it didn’t would “take action”.

Damn!

Has “Mad” Bob Katter been reading Mark McGovern’s paper on Australia’s Debt Dreamtime too?

His comments and policy directly (though insufficiently) seek to address one of the central points made in McGovern’s paper:

Reserve Bank policies are worsening Australia’s external position and needlessly driving up internal costs

… in recent decades the reliance on interest rate movements in inflation targeting along with an insensitive allocation of rates across investment classes have compounded problems and raised investment risk while doing little for inflation objectives. Clearly this challenges current conventions in Australia, and elsewhere, but an argument needs to be had. Reserve Bank of Australia decisions of interest rates may be well be worsening not only Australian competitiveness (since investment becomes markedly more expensive and unattractive as next discussed) but also its external position…

Now, watch all the usual suspects … the government, Treasury, “expert” economists, talking heads et al –  come out in force to denounce Bob’s policy as “mad” and “extremist”.

Just like they jumped all over Senator Joyce in 2009-10, for his courageous, prophetic, and correct call on the danger of ever-rising US debt levels.

Can’t have anyone with a public platform telling the truth about The Big Club, or starting to propose solutions that would undermine the status quo (read “power”), now can we (language warning):

Oh yes … by the way.

“Mad” Bob is right on the money concerning the Great Global Warming Hoax too.

Take very careful note of his comments in the following brilliant video, courtesy of the must-follow wakeup2thelies (from 1:34):

He’s on to the bastards!

And to top it all off, “Mad” Bob wants to change or remove outright the many ridiculous “Big Brother” nanny state laws … think fishing, firearms, camping, billy-boiling, etc … that seek to prevent us blokes from being proper blokes, and turn us all into soft, jelly-bellied, quiet, passive, make-no-trouble-for-government sheilas.

Definitely my kinda bloke, is Bob.

Begone our pathetic Australian cultural cringe … I admire good old-fashioned rough ‘n tough Aussie blokes.  Doubtless their slowly dying out is a big reason why I love old folk, and regretfully concede to feeling a mixture of scorn and sorrow for the latte-sipping, preening, “how-do-I-look?” obsessed, all-things-American-idolising Gen X and Y.

Hey Barn! How about pulling up stumps from the LNP coalition, and teaming up the National Party with Katter’s Australia Party?

One can only hope.

Interestingly, it seems that I’m not the only one who’d love to see the Green-Labor coalition get KAP’d:

Good guys still wear white – Katter’s Australian Party set to run Labor out of town

[Contrary to the line being pedalled by the LNP, a vote for Katter’s Australian Party will not play into Labor’s hands, Dean Bertram argues in The Australian Spectator this week. He writes..]

While I never thought that the progressive Left could teach us anything of worth, at the last Federal election they did. Those leftard voters who swung from Labor to the Greens were able to grab the reins of this country and steer it by their own faulty compass straight towards the perils of a carbon tax.

Imagine a brighter future, where, in place of the current monstrous Labor-Greens hybrid, Australia is governed by a minority Coalition government dependent upon the support of a party committed to solid conservative principals. And we know that [Bob] Katter wouldn’t compromise those principals should such a deal be struck. He wouldn’t sell us out.

We witnessed that when sides were drawn in the aftermath of the last Federal election. So if we want to turn this country around before we are forever trapped in the snares that the Left are setting, right-thinking Australians need to take a leaf out of the progressives’ playbook and change our own voting habits. Thanks to Katter, we finally have another viable choice: a new party that appears to be prepared to put the national interest and the rights of Australians above the dreams of dangerous globalists, be they crony capitalists or enviro-communists.

Katter is currently building a solid team for the Australian party’s inaugural run in the upcoming Queensland State election … The party currently has 43 candidates in place and plans to have about 75 by the time the election is called next year. Moreover, early poll figures indicate that it is set to replicate One Nation’s initial electoral success in that state.

… [L]et’s hope that Katter can round up an equally capable posse to join him in the Federal arena. Because good folk all across this great nation have been circling our wagons for some time now. We’re surrounded and being worn down by an ever-encroaching federal government, a rabid Marxist ideology that disguises itself behind political correctness and environmentalism, and a crony capitalist system that is inimical to both small business and what’s left of this country’s agricultural and manufacturing industries. The Australian party is shaping up to be our long-awaited cavalry. Which, after all, seems fitting, because the white-hatted Bob Katter is leading the charge.

Dean Bertram is right.

We leave the last word to Barnaby:

“I’ve always believed that if there’s a marketplace out there that can be filled in its political requirements by someone who can articulate a cause that collects a vote – good luck to them. That should be the job of all of us,” the Nationals’ Senate leader told ABC Radio today when asked about the idea of a new political party.

RBA Officials Have Vested Interest In Fate Of Aussie Real Estate

23 Jun

From Business Spectator, September 20, 2010:

According to a recent report by Goldman Sachs chief economist, Tim Toohey, household debt levels in Australia now stand at an elevated level, both in relation to historic norms, and compared to other countries. For instance, Australia’s debt to household income ratio is higher than in the United States and Spain, and stands at a similar level to the United Kingdom.

Toohey has written a perceptive report on the Australian housing market, in which he argues that housing prices are between 25-35 per cent overvalued. As a result, he says, we run the risk that Australia’s house prices could drop sharply if a sharp decline in Chinese growth prompted a steep drop in our export earnings.

Interestingly, it appears that Reserve Bank officials are the keenest investors in rental properties. “We are not sure whether to be relieved or concerned that of the five central bankers who were brave enough to note their occupation on their tax form, all five had an investment property!”, the report says. “Of the 200 occupations classified by the Australian Tax Office, the employees at the Reserve Bank topped the list with respect to their investment property exposure.”

There’s more than one way to look at this very interesting revelation.

1. The “independent” RBA has a vested interest in fuelling Australia’s property bubble – which helps to explain the low interest rate policies of the early 2000’s that so helped to encourage excessive borrowing and real estate speculation.

2. The “independent” RBA has a vested interest in keeping the property bubble afloat – so that RBA officials do not suffer capital losses on their existing property portfolios.

3. My favourite.  The “independent” RBA has a vested interest in first fuelling a property bubble with low interest rates – meaning officials make profits on the way up – and then, collapsing the property bubble at a time of their choosing (by raising interest rates), so that officials can buy in to the property market again (and buy up even more), after prices have fallen dramatically.

One can only wonder about the investments of “independent” RBA Governor, Glenn “$234k Pay Rise At GFC Peak” Stevens.  Has he profited from his Board’s decisions on interest rates? Will he personally profit by (again) raising interest rates into the teeth of an onrushing GFC 2.0?

Next time you hear an RBA official like Stevens talking about interest rates, or the housing market, just remember this article.

And remember that, whatever happens to the housing market, it is those same “independent” RBA officials who know what is going to happen… before you do.

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