When USA went off the gold standard (lite) in 1971, the banks began lending credit instead of money. Most of the USA economy was based on usury-free credit at that time. As I have noted before, all along the commerce and industry chain vendor financing at no interest drove the economy, with the fundamental loan being made by labor to industry.
Since there was no rational limit as to how much bank credit can be lent, when we went off the gold standard (lite) it was only a matter of discovering at what price bank-credit-at-interest drew people away from private-credit-at-no-interest.
Within a few years the powers that be ran interest rates from near zero when accounting for inflation up to 21%, studying each level and reactions. They discovered the unremarkable: the educated, wealthy, rich people can be trapped at low rates, the poor at high rates. The next 25 years was a thorough enslavement, which can go on for 400 years. Ask any ancient culture.
Volcker settled the credit markets and the banks moved their credit card facilities to states with no "usury" laws, and the banks began experimenting with rates up to 36%. People born after 1990 would not recognize 1970, indeed, would experience culture shock if they visited.
It really never matters what the credit interest rate was, or is, since the mal-credit costs nothing and represents no risk to the lender, and all rates do damage to the borrower and society, that is to say, benefit the lender, either slowly at low rates or quickly at high rates. Indeed, even negative interest rates don't matter, since there are no assets behind the loans of credit being made. Mere promises are going poof with negative interest rates, not assets lost. Pensioners are eating cat food to live, no one's villa or yacht is at risk.
Neither the banks nor the automakers care if interest rates are zero for 72 months, people are making money on creating the instruments, who cares what the instruments say. That mom has to eat Alpo so you get interest-free auto payments is not reflection on the automakers or the bankers, or for that matter capitalism (which is merely an idea), it is a reflection on you.
What are you going to do about it? Well, there is nothing you can do about the damage done, just don't be a claimant on what the hegemon is offering by way of settlement. And don't be like them. Stop with the interest, regardless of the rate (and zero is not free).
You can only start your own business. Nothing else will work.
Feel free to forward this by email to three of your friends.
Since there was no rational limit as to how much bank credit can be lent, when we went off the gold standard (lite) it was only a matter of discovering at what price bank-credit-at-interest drew people away from private-credit-at-no-interest.
Within a few years the powers that be ran interest rates from near zero when accounting for inflation up to 21%, studying each level and reactions. They discovered the unremarkable: the educated, wealthy, rich people can be trapped at low rates, the poor at high rates. The next 25 years was a thorough enslavement, which can go on for 400 years. Ask any ancient culture.
Volcker settled the credit markets and the banks moved their credit card facilities to states with no "usury" laws, and the banks began experimenting with rates up to 36%. People born after 1990 would not recognize 1970, indeed, would experience culture shock if they visited.
It really never matters what the credit interest rate was, or is, since the mal-credit costs nothing and represents no risk to the lender, and all rates do damage to the borrower and society, that is to say, benefit the lender, either slowly at low rates or quickly at high rates. Indeed, even negative interest rates don't matter, since there are no assets behind the loans of credit being made. Mere promises are going poof with negative interest rates, not assets lost. Pensioners are eating cat food to live, no one's villa or yacht is at risk.
Neither the banks nor the automakers care if interest rates are zero for 72 months, people are making money on creating the instruments, who cares what the instruments say. That mom has to eat Alpo so you get interest-free auto payments is not reflection on the automakers or the bankers, or for that matter capitalism (which is merely an idea), it is a reflection on you.
What are you going to do about it? Well, there is nothing you can do about the damage done, just don't be a claimant on what the hegemon is offering by way of settlement. And don't be like them. Stop with the interest, regardless of the rate (and zero is not free).
You can only start your own business. Nothing else will work.
Feel free to forward this by email to three of your friends.
