Usury, what we today call interest, was an unthinkable crime for the first 1800 years of Christianity. Like murder and rape, it occurred, but its practice often carried the death penalty. The reason is usury is forbidden is because it does harm - it allows the few to aggregate power unto themselves by means of lending at interest, and then you get people literally calling the shots, and war, famine, destruction, all of the things you see around the world today with unbridled usury.
When the church-state struggle began, the state sneaked in usury under the guise of charity, or Monte Pietas. The state argued it was for charity, the church slowly said they had no say so in the prudential judgment of civil authority. So the state introduced what the Church forbid, as long as it was "for the children." Now comes the oldest of these charitable corporations, just as bad as any other...
Banca Monte dei Paschi di Siena S.p.A. (Italian pronunciation: [ˈmonte dei ˈpaski di ˈsjɛːna]) (MPS) is the oldest surviving bank in the world and Italy's third largest bank. Founded in 1472 by the magistrate of the city state of Siena, Italy, as a "mount of piety", it has been operating ever since. Today it has approximately 3,000[2] branches, 33,000[2] employees and 4.5 million customers in Italy, as well as branches and businesses abroad. A subsidiary, MPS Finance, handles investment banking.[3] The bank's main shareholder is the Fondazione Monte dei Paschi di Siena.
As you see, now that it has gone mainstream, it too is failing to perform -
Recall that three weeks ago we warned that “Monti Paschi Faces Bail-In As Capital Needs Point To Nationalization” although we left open the question of “who will get the haircut including senior bondholders and depositors…. given the small size of sub-debt in the capital structures.” Today, as many expected on the day following the German elections, the dominos are finally starting to wobble, and as we predicted, Monte Paschi, Italy’s oldest and according to many, most insolvent bank, quietly commenced a bondholder “bail in” after it said that it suspended interest payments on three hybrid notes following demands by European authorities that bondholders contribute to the restructuring of the bailed out Italian lender.
Usury is wrong because it does damage. There is no benefit to lending at interest to be realized, the only result, inevitably is chaos,poverty, war, destruction. And there are alternatives that give us what we need without the damage done by usury.
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2 comments:
I agree that usury is indeed wrong and destructive. But I do not think that it will be banned anytime soon. As private individuals and businessmen, how can we operate without using the usury system? We only accept debit card, check and cash transactions? Use Western Union?
Banned? Just because it is wrong does not mean it ought to be banned. Usury can maintain only by the force and fraud of a violent hegemon. It is enough to withdraw the consent to be governed to get rid of usury.
A gargantuan mistake is to think money, currency or ex nihilo credit is necessary for small biz to thrive. Credit is necessary and sufficient, such as was predominant in commerce when I began, a mere 40 years ago. We need no permission to create credit, indeed, it is now an existential need.
John
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