Global real interest rates and the ‘suprasecular’ decline, 1311

Re: Global real interest rates and the ‘suprasecular’ decline, 1311–2018 (2020)

#171

Post by chordalkeyboard » Fri, Jan 29, 2021, 11:57 PM UTC

gher-shyu3i wrote: post #170

chordalkeyboard wrote: post #57

Earlier quoted context omitted.

I disagree. The price of money across a period of time, denominated in monetary units, is the most important price in a diverse economy and setting it to zero causes all sorts of distortions. If someone can’t afford to pay interest on a debt then they should not take on the debt. My opinion of “usury” is that it refers to loans where the interest continues to accumulate if the debt is not paid. I think this can be so…

In Islam, there is no difference if interest continues to accumulate or not. A $1M loan with a $10 "fee" is still a usurious loan and is prohibited. This is not open for opinions. We're not going to have any meaningful progress if this issue is not tackled. Any talk of "equity" is nonsense until then. > setting it to zero causes all sorts of distortions It doesn't, because under Islamic law, loans are purely an act o…

> This is not open for opinions.

Thank God and all His angels that I’m not Muslim then.

> We're not going to have any meaningful progress if this issue is not tackled.

Exactly, however tackling it is going to include educating people on the time value of money.

> It doesn't, because under Islamic law, loans are purely an act of charity.

Fortunately I don’t abide by Islamic law.

> If you want to make money, you invest it, where the investor and invetee both take on risk, not like the basically one-sided interest contract where the lender is all but guaranteed to profit.

Lenders are not even close to guaranteed to profit, and a loan is a type of investment.

Re: Global real interest rates and the ‘suprasecular’ decline, 1311–2018 (2020)

#172

Post by gher-shyu3i » Sat, Jan 30, 2021, 3:48 AM UTC

chordalkeyboard wrote: post #171

gher-shyu3i wrote: post #170

Earlier quoted context omitted.

In Islam, there is no difference if interest continues to accumulate or not. A $1M loan with a $10 "fee" is still a usurious loan and is prohibited. This is not open for opinions. We're not going to have any meaningful progress if this issue is not tackled. Any talk of "equity" is nonsense until then. > setting it to zero causes all sorts of distortions It doesn't, because under Islamic law, loans are purely an act o…

> This is not open for opinions. Thank God and all His angels that I’m not Muslim then. > We're not going to have any meaningful progress if this issue is not tackled. Exactly, however tackling it is going to include educating people on the time value of money. > It doesn't, because under Islamic law, loans are purely an act of charity. Fortunately I don’t abide by Islamic law. > If you want to make money, you invest…

> Exactly, however tackling it is going to include educating people on the time value of money.

Which Islam acknowledges. As a matter of fact, the borrower is encouraged to return more than the amount he borrowed as a show of gratitude, but it cannot be in the loan contract nor implied or enforced in any way.

> Fortunately I don’t abide by Islamic law.

Yet people keep crying at the wealth gap and inflation rates and the government printing money and only a tiny percentage at the top benefits at the misery of everyone else. Islamic law is there to make a stable and just society, not for us to be wolves and destroy one another, which humans have done time and time again and it's never going to change.

> Lenders are not even close to guaranteed to profit

They are contractually owed a profit. They can go after the borrower in case of default with the full support of the law and take not only the principal, but the interest on top. This would never happen if the loan were an act of charity. The fact that the entire banking industry exists is proof that it's a very lucrative business to be in.

> and a loan is a type of investment

This isn't a strong argument because hiring a hitman is also an "investment" or "business transaction". Islam places restrictions on investments. For instance, investing in a tobacco company or a casino is prohibited. Lending money with interest is another prohibited investment.

Re: Global real interest rates and the ‘suprasecular’ decline, 1311–2018 (2020)

#173

Post by toomanybeersies » Sat, Jan 30, 2021, 3:59 AM UTC

strken wrote: post #89

steveBK123 wrote: post #76

Earlier quoted context omitted.

Also, I’m not sure exactly how you meant it, so I won’t direct this at you, just generally... I can’t get over the techbro straw man of the “lockdown” I’ve seen thrown around a lot. First, compared to most of Asia that actually got this virus under control, we have never really had much of a true lockdown here. Second, it’s not the lockdown, its the pandemic. In most areas economic activity dropped off well before an…

Can't speak to the US lockdown, but Melbourne, Victoria, Australia had restrictive lockdowns (1 hour outdoor exercise with up to 2 people together, 1 daily trip to the supermarket per household, couldn't travel more than 5km from your house, police roadblocks out of the city and out of the state, non-essential industries shut down and some essential ones operating at significantly reduced capacity, 8pm-5am curfew) an…

However, despite a spike in calls, the actual number of suicides in Victoria was lower in 2020 than previous years [1]

[1] https://www.theage.com.au/national/victoria/suicides-in-vict...

Re: Global real interest rates and the ‘suprasecular’ decline, 1311–2018 (2020)

#174

Post by anticodon » Sat, Jan 30, 2021, 5:49 AM UTC

helge9210 wrote: post #168

anticodon wrote: post #167

Earlier quoted context omitted.

Revolution happened before Slavyansk. It had achieved its goals: now Ukraine is the poorest state in Europe, on par with African countries. Biden's son company Burisma had stolen trillions from Ukraine. All the industry is destroyed. Only Motor Sich still barely survives, but obviously not for long. Besides it was already sold to China, but now there's some dirty scandal about it. Also, my initial point wasn't about…

There are so many factual errors in your comment you're not even wrong.

Time will show. I didn't want to argue about Ukraine, nobody cares about Ukraine, its fate is sealed.

I wanted to leave a prediction about approaching war. There will be an attack by USA. What still puzzles me is what would be the casus belli because after this year not many people outside of US believe in democracy in US. So, the usual argument: "We bomb X to bring democracy!" will hardly work.

Maybe there would be some kind of provocation, similar to 9/11. "Russia did it. We found a Russian passport where it happened!"

Re: Global real interest rates and the ‘suprasecular’ decline, 1311–2018 (2020)

#175

Post by chordalkeyboard » Sat, Jan 30, 2021, 6:21 AM UTC

gher-shyu3i wrote: post #172

chordalkeyboard wrote: post #171

Earlier quoted context omitted.

> This is not open for opinions. Thank God and all His angels that I’m not Muslim then. > We're not going to have any meaningful progress if this issue is not tackled. Exactly, however tackling it is going to include educating people on the time value of money. > It doesn't, because under Islamic law, loans are purely an act of charity. Fortunately I don’t abide by Islamic law. > If you want to make money, you invest…

> Exactly, however tackling it is going to include educating people on the time value of money. Which Islam acknowledges. As a matter of fact, the borrower is encouraged to return more than the amount he borrowed as a show of gratitude, but it cannot be in the loan contract nor implied or enforced in any way. > Fortunately I don’t abide by Islamic law. Yet people keep crying at the wealth gap and inflation rates and…

> Which Islam acknowledges. As a matter of fact, the borrower is encouraged to return more than the amount he borrowed as a show of gratitude, but it cannot be in the loan contract nor implied or enforced in any way.

If people are free to practice Islam then they must also be free to choose not to practice Islam and require interest on loans.

> Islamic law is there to make a stable and just society, not for us to be wolves and destroy one another, which humans have done time and time again and it's never going to change.

Respectfully, I’m not interested in becoming a Muslim.

> They are contractually owed a profit.

They are contractually owed a payment. Its not profit until expenses are subtracted. And there is always the risk that the other party does not return the money.

> They can go after the borrower in case of default with the full support of the law and take not only the principal, but the interest on top.

It seems you may have identified a problems with the law then.

> This isn't a strong argument because hiring a hitman is also an "investment" or "business transaction".

A hitman is not an investment and as a transaction, it is for the performance of a crime (presumably). So it is already prohibited as it is the commissioning of a prohibited act, there is no need to consider it an investment to regulate it. Surely Islam also prohibits murders if they are done for free.

Re: Global real interest rates and the ‘suprasecular’ decline, 1311–2018 (2020)

#176

Post by pas » Sat, Jan 30, 2021, 11:21 AM UTC

lettergram wrote: post #59

Don’t need interest rates when they print money. If you would like to learn more: http://anuparty.org/on-interest-slavery/ Effectively, banks can lend on margin. They put 10% down, you pay back 100% of the loan + some little interest. What does that mean? They can loan out 10x the money they have, and people pay it back in full, 10x their return. Each of those have a small bit of interest and fees. Making them a nice…

At least for the last few decades the limiting factor for money creation was interest rate, not the fractional reserve requirement.

Since there's a very active overnight market for lending excess reserves banks just borrow reserves if they need more to meet the requirements. This is the rate that central banks influence.

In the UK the fractional reserve requirement is 0% for example.

Lending is entirely risk-weighted ROI limited.

Re: Global real interest rates and the ‘suprasecular’ decline, 1311–2018 (2020)

#177

Post by gher-shyu3i » Sat, Jan 30, 2021, 4:46 PM UTC

chordalkeyboard wrote: post #175

gher-shyu3i wrote: post #172

Earlier quoted context omitted.

> Exactly, however tackling it is going to include educating people on the time value of money. Which Islam acknowledges. As a matter of fact, the borrower is encouraged to return more than the amount he borrowed as a show of gratitude, but it cannot be in the loan contract nor implied or enforced in any way. > Fortunately I don’t abide by Islamic law. Yet people keep crying at the wealth gap and inflation rates and…

> Which Islam acknowledges. As a matter of fact, the borrower is encouraged to return more than the amount he borrowed as a show of gratitude, but it cannot be in the loan contract nor implied or enforced in any way. If people are free to practice Islam then they must also be free to choose not to practice Islam and require interest on loans. > Islamic law is there to make a stable and just society, not for us to be…

> If people are free to practice Islam then they must also be free to choose not to practice Islam and require interest on loans.

That's not the point of discussion. The argument is that we have known for literally thousands of years that charging interest on loans is a destructive practice. It's banned in Islam, Judaism, and Christianity for a reason. Yet we cry today at the mess we're in, as if we didn't know any better.

> They are contractually owed a payment. Its not profit until expenses are subtracted. And there is always the risk that the other party does not return the money.

They're owed more money than the capital. That's what is prohibited. It doesn't matter if it's profit or revenue. Banks operate and generate ridiculous profits on this basis.

> It seems you may have identified a problems with the law then.

So the law can't protect the contract? What's the point in writing a contract then in the first place? Take that away and no business contract makes sense anymore since it can't be enforced by the law.

Re: Global real interest rates and the ‘suprasecular’ decline, 1311–2018 (2020)

#178

Post by chordalkeyboard » Sun, Jan 31, 2021, 12:18 AM UTC

gher-shyu3i wrote: post #177

chordalkeyboard wrote: post #175

Earlier quoted context omitted.

> Which Islam acknowledges. As a matter of fact, the borrower is encouraged to return more than the amount he borrowed as a show of gratitude, but it cannot be in the loan contract nor implied or enforced in any way. If people are free to practice Islam then they must also be free to choose not to practice Islam and require interest on loans. > Islamic law is there to make a stable and just society, not for us to be…

> If people are free to practice Islam then they must also be free to choose not to practice Islam and require interest on loans. That's not the point of discussion. The argument is that we have known for literally thousands of years that charging interest on loans is a destructive practice. It's banned in Islam, Judaism, and Christianity for a reason. Yet we cry today at the mess we're in, as if we didn't know any b…

> The argument is that we have known for literally thousands of years that charging interest on loans is a destructive practice.

We don’t know that, we only know that Abrahamic theocrats have prohibited it.

> They're owed more money than the capital. That's what is prohibited. It doesn't matter if it's profit or revenue.

Yes, this is foolish.

> Banks operate and generate ridiculous profits on this basis.

Banks generate ridiculous profits in fractional reserve banking. In a system where they have to survive on the difference between interest collected and interest paid then they only profit when they make good loans and are able to collect them in a timely manner.

> So the law can't protect the contract? What's the point in writing a contract then in the first place?

How does the law draw blood from a stone? You yourself said the law is wrong for continuously accumulating interest on an unpaid debt. It seems youkve forgotten the problems you already identified.

> Take that away and no business contract makes sense anymore since it can't be enforced by the law.

This only applies to the business contract that we have both identified as problematic.

Re: Global real interest rates and the ‘suprasecular’ decline, 1311–2018 (2020)

#179

Post by gher-shyu3i » Mon, Feb 01, 2021, 2:01 AM UTC

chordalkeyboard wrote: post #178

gher-shyu3i wrote: post #177

Earlier quoted context omitted.

> If people are free to practice Islam then they must also be free to choose not to practice Islam and require interest on loans. That's not the point of discussion. The argument is that we have known for literally thousands of years that charging interest on loans is a destructive practice. It's banned in Islam, Judaism, and Christianity for a reason. Yet we cry today at the mess we're in, as if we didn't know any b…

> The argument is that we have known for literally thousands of years that charging interest on loans is a destructive practice. We don’t know that, we only know that Abrahamic theocrats have prohibited it. > They're owed more money than the capital. That's what is prohibited. It doesn't matter if it's profit or revenue. Yes, this is foolish. > Banks operate and generate ridiculous profits on this basis. Banks genera…

> We don’t know that, we only know that Abrahamic theocrats have prohibited it.

(1) They're prophets. (2) We know that, look around you at what's happening.

> Yes, this is foolish.

It's not. Look around you at the disasters.

> they only profit when they make good loans

An interest bearing loan is, by definition, not good. It's predatory. So it means that those banks profit most on the most predatory loans, exactly as I was explaining.

> You yourself said the law is wrong for continuously accumulating interest on an unpaid debt

That's part of it. The argument is that the law protects interest bearing loan contracts instead of nullify them.