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Old 29-04-2012, 05:49 AM   #52
mpe_solution
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Join Date: Nov 2011
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Quote:
Originally Posted by jon galt View Post
An excelent analogy and the way i see it that interest is more paying for a service, the loan more than any thing else. A service that is mutually beneficial or eles the borrower would not take the loan in the first place fe if i lose my cash and use my credit card to pay my teainfair home im more than happy to pay for the money lending service. That said i try to aviod debt at all costs however tempting that may be.
You accept promises to pay now, they just happen to be printed by the banking system and enforceable by law. The problem is the nature of money is obfuscated. Banks do not loan us existing money. They create the money when we sign a promise to pay. They give up no lawful consideration.

What is the value of money over time? Money is just evidence of entitlement. It's all created by promises to pay for something in equal value of our own production. When we allow interest, we as issuers of promises to pay, end up paying 3x - 5x the production for something we should only have to pay for once.

On top of this, there is only enough money in circulation to pay the principal back. The interest charged on top of the principle causes the multiplication of this artificial indebtedness. Having to reborrow both principal and interest to service the loan the debt continues to grow to the point of terminal failure of the system.

In the example of the house under MPE, the infrastructure is there to monetize our promises to pay. The seller gets his money right away. There is no risk for him. Also, because there is an obligatory schedule of payment, the debt is repaid at the rate of consumption of the underlying property, so if a debtor defaults, the remaining value of the property matches the remaining obligation to pay the debt back out of circulation.
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