Banks need Boundaries! Banken in die Schranken!

Petition:
Banks need Boundaries!

Many people become fixated on interest and the devastating effect of compound interest. The plainest possible explanation for this on kindergarten level: Sandra has no one to play with, so she loans ten marbles to each of her mates John, James and Jonah. They agree on an annual interest rate of 10 percent, and enjoy their new toys. In a year's time, the three boys owe her not ten, but eleven marbles each. Where do those extra three marbles come from?

This is one reason why economic doctrine places such a high value on "growth" and "competitiveness". John can "grow", but only at the expense of his two "competitors".

In a footnote on p. 38, "Where does money come from?" (nef) argues "there is not a problem with non-compounding interest when it genuinely represents the lost opportunity [of temporarily handing money over to someone else]. But [in the current system] there is no loss of resource."
In plain English: there is a difference between the generally accepted form of interest, and lenders collecting interest on money that they created out of thin air.

Your gut instinct (especially if you are "comfortably off") might be to reject this idea. However, please consider that in some European countries, the interest rate on basic savings accounts are now lower than inflation rates.

One could therefore argue that "the little man", unbeknownst to him, is not only being refused access to the benefits of interest - he is even being shifted towards a depreciative currency. (And unlike "good" depreciative currency as used in the Miracle of Wörgl, our current system preserves the right of those "at the top" to hoard money through a panoply of property rights, financial instruments, tax laws, too-big-to-fail aka old-fashioned blackmail!)

To obtain those extra three marbles, one option would be creating debt-free money, injected into the economy by government expenditure, e.g. a Citizen's Income. Look at the International Movement for Monetary Reform for an overview of organisations aiming to instate "positive" money.

Read Positive Money's take on the issue. Don't miss the intro to Hörmann's iMoney in the comments section!


by Michael K for Banks need Boundaries!

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