>Introduction The biggest problem in the world today is Interest.

Compared to other problems, Interest is much more serious as a problem. I shall demonstrate this in the following discussion. Secondly, without fixing interest none of the problems we face today in the world can be permanently solved. They may be temporarily delayed for some years/decades but will inevitably resurface soon. Some people realize that the fed/state bank is a big problem in many nations, however, it is not the root. Today in the fiat economy 97% of the money is electronic. The root starts with interest. Credit is money in this economy. Easy credit, Boom. High Interest Rates, Bust. All controlled by the central bank btw, not subject to any court order. In the US and EU the fed/EU bank is completely separate from law. In the US fed can be dissolved by legislative bodies. In EU it can't anymore from 2012. Why would anyone think that interest is bad? It is money paid to compensate the time lost right. Right. People try to break this logic to try and explain the problem of interest by saying how it is morally or religiously wrong without ever providing a scientific explanation. They are wrong to provide such arguments as science. This is completely sound logic. From an individual/entity point of view interest is completely justified. From a social/community point of view however, interest is a mathematical impossibility to recover if there is an issuing monopoly. Anything that is a mathematical impossibility to recover, cannot be recovered. Ever. Thus, interest is wrong. Before I explain the mathematics, please note that from an individual's point of view murder is also legal, as it provides a net benefit to the individual if he/she wants the murder someone. However, murder is a massive social cost from a societal point of view. All of this, is besides any moral systems. They are yet to be discussed.

>On Finance Suppose Hook Nose from another nation comes to a society with 10 individuals. He says why don't you use gold units as currency. People say no, fuck u, we have no use for gold, besides we got a little gold mine anyway. Hook Nose takes no offence apparently (he doesn't show it). He says, look, it will be much easier to use units rather than to barter, I'll give you the gold, besides women want gold for ornamentation, its free, in return all I ask is to let me into your economy and provide this service. People think it over, realize it's a good deal, say yes. They don't think about the long term, because at that time there is no long term. People start using gold coin units. They have 1 gold coin from the mine before, Hook Nose gives them 2 coins each, So in total they all have 11 gold coins, 1g for each 9, 2g for the 10th person that owns the gold mine. After a few months, some people have 2g coins some have 1g, some none but the mine person 3g, because he mines 1g coin per year from the mine. 12g coins now in the economy. That year it rains and floods come. Hobo person does not have 1g but food costs 1g now because of no crops, so he can't buy food. Hook Nose is a smart person. He comes to hobo person and a few others, let's say total 5 and says, look persons food is short this year and people have to buy other stuff too, so I can only give you a loan of 5g (the key here is to give an excess loan). However, this is my money and this time I can't give it to you for free, I'll give it to you at 7.25% interest compounded yearly. You can give this back to me after 10 years. The collateral is your most valued asset. The math on this is:

FV=PV*(1+r/n)^n*t =PV*(1+0.0725/1)^(1*10) =PV*2.01356 2.01356 times the present value. They each have to pay him back approximately 10g instead of 5g after 10 years (taking integer number rounding). People think it's a good deal as they could probably save 10g-(5g-1g for food)=6g over 10 years, and they need to eat anyway, so they take it. During this time, farmer person gets rich: 9g-4g(farm cost)=5g, mine person: 3g-1g=2g. 25g extra in economy now. Total 32g in the economy. Hook Nose is a real smart person; he knows it's time for a bust cycle. No more loans, that's all he needs to do. 10*5g=50g, that is the payment owed to him. In 10 years mine will mine 10g. Let's say there's an improvement process and they mine 15g instead which is a 50% improvement, which is pretty big taking R&D and the cost of running the mine into account. Total money in the economy after 10 years is 32g+15g=47g. So how the fuck are they going to pay back 50g?

>On Economics Someone has to default. No matter how good your business is, if you don't have liquid assets you're fucked after 10 years. So, who is more likely to have ample cash after 10 years? Either the mine person or the food person right? Who has nothing? The hobo person from before most likely; he may have invested assets but not a good cash flow. But mine person knows gold is better in the future. So he'll hoard it in hard times instead of giving a loan to hobo person. Hook Nose will take Hobo Smith's smithy factory. Hobo has nothing. Hobo can't eat. Hobo goes to work for Farm person now instead of running/owning his own factory. Rinse repeat 10 years. What do we learn from this? We learn: 1) The interest system is racketeering. 2) 5g looks great in the short run but after 6 months due to excess money in the economy i.e. Inflation. 5g will have the same purchasing power as 2g. 3) If you want to have a chance of paying back the gold, you have to take it from someone else i.e. steal it. 4) Run this racket on the gold mine once and it's even more profitable. Since you will own the gold mine, you will have a monopoly over issuing currency. i.e. similar to a central bank. 5) There is no such thing as a business cycle with booms and busts. It is human financial engineering at work which cause booms and busts.

The most fundamental principle however for this to work is that Hook Nose must have a large sum of money. If we assume that this economy is as big as Alaska, Hook Nose will have to have a LOT of money which is realistically difficult to achieve. Luckily, in the future he wouldn't. Say hello to the Fractional Reserve Banking (FRB) system. Now with fiat money, banks don't need to own anything to give out credit. Given a reserve ratio of 10 to 1, Hook Nose only needs 2.5g of money to run this racket. Moreover, that 2.5g doesn't even have to be his own. It can be anyone's deposit. Assuming this example economy, at any given time there are deposits of 5g, Hook Nose can give out loans of 50g out of nothing. All this time I haven't even mentioned the farmer person. If the bank takes all the farmland and makes a oligopoly with the big farmer person then it becomes the real Monsanto farmer person. Small

farmers don't even stand a chance. Today the FRB reserve ratio is 20 to 1 or more. Derivatives sometimes don't even have to have a reserve. Austrians cry gold. Gold is a foolish solution. Bankers can manipulate gold as easily as fiat money because of its inherent scarcity. Moreover, they can manipulate gold even better if they have the gold market on their side through ownership (market shares) or control (executives/board). Not to mention, in the real world the price of gold is also linked to other commodities which can affect it independently. Bitcoin is not a good thing. Bitcoin is scarce. Scarce things are bad for money. I will discuss the nature of money in a later discussion. "http://realcurrencies.wordpress.com/interest-free-economics/" Say thanks to Anthony Migchels, a real hero.

There is also another huge point that I forgot to discuss here. As long as the economy is small, stealing is the given choice from point number 3 from above, but what happens when it grows large. How can companies or governments steal? Well they could steal from each other, yes, but that will present a host of new problems since stealing is illegal. What about that shitty country to your side that has no army, is poor as shit since Hook Nose didn't go there. An interjection here. Contrary to popular belief, there is no true concept of international law, only power rules internationally. While certain economic, social, military, political and geographic agreements can be made in the short term for Mutual Benefit, there can be no long term agreement simply because there is no other power to enforce the law. As long as mutual benefit holds, the is a tenuous law. Military aggressive action is often unfavourable to nations who have less of a chance of winning a war against a stronger army. True international law thus, is the Leverage you hold against a foreign nation. This can be Leverage can be financial, militaristic, geopolitical or other in nature. Key point is that side country doesn't have much potential future credit or army. Take note here that while you may be not much better off than them in terms of assets you have lots of potential for future credit, all thanks to Hook Nose. This means you can use this to get real assets in the short term before people realize that. Side Country has less stuff than you at the moment but has all sorts of untapped resources for use in the future. Why don't you invade them and steal their gold mine. Then you can pay back Hook Nose. We learn from this: 1) Of the prime reasons for wars, one is interest payment. 2) The reason for required perpetual growth, is interest. Why does the economy have to grow? Surely more population means more potential GDP but why do we need to grow further than that what the population requires for maximal output? The truth is even a maximal output economy cannot pay back the interest. 47g is still less than 50g even if everyone's working hard. It is all to pay back interest to the bankers. This can never result in a sustainable economy. Other than by taking from others for a limited period of time, interest cannot be paid back. Today, you can't even do that, countries struggle even to pay an installment of interest, forget the whole sum which is mathematically unpayable. Someone still needs to default. Always. If you don't have enough to pay interest, such as the war doesn't turn out to be as profitable as hoped. But truthfully, today everyone is in debt and has to pay interest, so there will never be a situation that not even a single person in the economy will default. Default has become inherently inevitable. If someone was calculating risk and came with a resolution that default will become inevitable in a deal. That deal would never be approved by any company, yet this is the system we live in today.

People seem to think it is better that someone else in the economy takes the hit than themselves, even if they have to steal, manipulate or be corrupt to achieve it. This ideology is the birthplace of greed and corruption. Sadly, it is a forced way of thinking that would never be if there was no interest economy. What happens when you've killed everyone in other nations and taken all the space? Everyone will turn on each other in a bloodbath.

>On the Debt Economy There is point to be made here. Another way to temporarily stay the accumulated interest of the economy is to be in debt even further. So, if bankers want a boom instead of a bust at the end of a debt period, all they have to do issue more loans. Hook Nose comes to you when you default in the small bust, takes your real assets, but if you go to the bank again he will give you a loan even though your credit history is not that good. This also makes it so that he can control and plan the period when you want to war to better suit his needs in response to the political or geographic factors. Keep in mind that Hook Nose by now probably owns the country, holds leverage over politicians, media, secondary industries, education, the tertiary sector and the food economy. All accomplished through buying companies in the bust cycles while never being in any danger. Thinking logically if your money supply is fixed, further growth in the economy would be deflationary. Interest is inherently deflationary as well because of the inherent need to pay interest to the savers in the economy as well as the banks. Why is it that prices never go down then? More loans. Why is it that purchasing power keeps reducing over and over? More loans. Why is it that everyone isn't employed then? Occasional busts. Everyone knows busts are deflationary. Sometimes people here make the point: If the bankers can extend the loan forever by doing this again and again, why don't they do that? Well there are reasons: 1) Why the hell would they want to do that? No benefit to bankers themselves. 2) Banks/Rich People (people with liquid assets) gain the most during busts. They can convert fictional fractional reserve credit into real assets during busts. Sure banks do lose money temporarily in a bust. But they can buy real companies with real assets and people on pennies on the dollar in busts and sell for massive gains during booms. There's also the fact that during busts most people don't have any money to buy companies. They are busy saving money. Banks can come in and buy anything they want as the prime bidders. 3) Banks/Rich People can easily shut out competition during busts as the financial credit available to smaller companies as compared to larger ones is much smaller. Larger companies therefore survive crashes and buy smaller companies for a net gain in the coming boom. 4) Banks cannot perpetually give loans out because very quickly the industry requirements are exhausted. Everyone is employed and there is no further labour to be employed. Meaning there is no more useful output of the economy. Other factors may be that physical resources are exhausted at different locations or excess money will cause unnecessary price inflation and thus wage inflation at the banks' business running expense. Why waste resources. It is notoriously difficult to cut wages, even when people would be getting better purchasing power. People are undereducated in this regard or rather misinformed. The excess money may be employed in derivatives and speculation to the banks benefit though, I need to research derivatives better. In the long run you cannot stave off resource scarcity. Population and interest keep increasing till you've used up all the land and resources. So you run out. When real assets run out there will be a massive crash the likes of which has never been seen before. Today, in developed economies there is a problem that birth rate is decreasing. Why is that a problem?

Without interest it wouldn't be a problem, as a sustainable economy could be developed. With interest it is a problem because interest keeps increasing and labour becomes expensive. For cheaper labour there needs to be more of it. Simple demand and supply. It is better to develop a sustainable economy to indirectly control the amount of population, especially since there is a very strong moral hazard here. You cannot kill away the population to control it. Better to use preventive financial measures and kill interest instead.

>On wealth disparity To gain from interest in a bank a depositor has to have at least USD $522,000 to actually gain money over a course of 10 years, if you take inflation into account. And that isn't even including any special events such as market failures or unpredicted busts. Only very few people actually have that amount of money. In the united states less than 12% of people have that amount of cash in savings at any given moment. So, if a bank has to pay interest it needs to pay it through the economy. This means that 89% of people pay interest to the remaining 11%. Then people ask why there is disparity. Well obviously all the money is being suctioned like a vacuum to the saving deposits of large savers to pay their interest. Of the remaining 12% the rest also pay interest. They pay more interest to the top 1-2%. This is the real reason why rich people remain rich. *Wall Street risers are a fad. I've never seen any of them put forth an argument that interest is the real reason that there is disparity. Sure there are other factors but they are not even comparable in magnitude to interest siphoning. *