Sunday, 17 December 2017

Interest about interest

My blog about interest

The first is well known, the second not so much.
It's a slow day in some little town........
The sun is hot....the streets are deserted.
Times are tough, everybody is in debt, and everybody lives on credit.

On this particular day a rich tourist from back west is driving thru town.
He stops at the motel and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs in order to pick one to spend the night.
As soon as the man walks upstairs, the owner grabs the bill and runs next door to pay his debt to the butcher.
The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.
The pig farmer takes the $100 and heads off to pay his bill at the feed store.

The guy at the Farmer's Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her services on credit.
She, in a flash rushes to the motel and pays off her room bill with the motel owner.
The motel proprietor now places the $100 back on the counter so the rich traveler will not suspect anything.

At that moment the traveler comes down the stairs, picks up the $100 bill, states that the rooms are not satisfactory, pockets the money & leaves.

NOW,... no one produced anything...and no one earned anything...however the whole town is out of debt and is looking to the future with much optimism.

The other :

You and I are in a lifeboat.  I have a bottle of water, and $1.  You would like water.
So , I propose to lend you the dollar so that you can do whatever you want to do ( economic freedom).  The loan rate will be 10 %.
You agree ,and buy the water .  
But now you are in debt to me to the tune of $1 plus interest. ( 10 cents)
We are in a lifeboat there is only a bottle of water , you, me and a dollar note.
Where does that ten cents appear from and how will it get paid back.   

You now are beholdant to me until that ten cents is returned. ....

So in the first example.   What was missing , but not missing in the second example.

Interest. 

Energy can neither be created nor destroyed.  Money is a facsimile of energy.

Therefore you cannot create money unless it's backed by produce ( energy,  all the different forms of solar, either through your labour or gasoline ina car.)
If one looks at the Abrahamic religions the same abhourrance rears its head. Islam , Sharia prohibits " Riba" calling it   "Haram" ( sinful and prohibited )
In the old testament, the Shemitah is the final year in a 7 year debt cycle and land use. The purpose of the Shemitah was to allow the land to recover and to provide for the poor as well as breaking the cycle of perpetual debt and subsequent debt enslavement.
Until we address that.   All or anything that doesn't address the fundamentals is just noise.   

Btw guess who was the last person to try to address this conundrum.    Gives one a headache just thinking about it

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