Freedom from Usury

Silver Stock Report

by Jason Hommel, Jan 23, 2004

Last week, I wrote an article, “Usury Enslaves“.  In this article I will discuss what I feel is the solution to the problem of usury.  I will discuss how and why society will benefit from the freedom from usury, and I will discuss how to become free individually.

The bankers today extract usury and pile up wealth.  The Federal Reserve is the greatest banker of all.  Under this economic system of usury that enslaves, people are deprived of their wealth and productive capacity through excessive income taxes and inflation, and thus, we have a large welfare state for the poor.  We have social security, and increasingly, socialized medicine, too.  This is why usury is so bad.  Like slavery, it destroys incentives for productive work, and it fosters socialism and communism.  Government give-away programs do not compensate for the theft.  The incentive to produce is lost in the process.

In the United States, slavery is illegal.  In the United States, extortion is illegal.  But usury is legal.  It’s quite a contradiction.

Would the economy come to a halt without usury?   If you think about it for a while, I’m confident that you will conclude, as I have, that there is no economic reason to need usury.  Each and every type of economic transaction that would be required for a normal and healthy economy can be conducted without resorting to usury.

Imagine if you could not lend.  This would not prevent you from making investments, such as buying stock, nor would it prevent you from accumulating capital.  You could still buy land, labor, commodities, and buy whatever you wanted to produce things to sell and make more money.  You could hire all the managers you wanted (without resorting to enslaving them).  Or, you could hold on to your money in the form of honest gold and silver.  If there were no bonds, competing for investment dollars with stocks, what do you think would happen?  Would that have a positive or negative effect on the stock market?  Of course, it could be only positive for the stock market.  Capital, therefore, would be more freely available to entrepreneurs, (managers of publicly traded companies) not less available. 

Bonds literally siphon money away from productive enterprise.  It lures money into funding bad government programs, or bad management decisions created by overly greedy entrepreneurs who are trying to take short cuts with their business growth plans.

It is interesting that even the word “bond” is related to the word “slavery”.  Slaves are kept in bonds.

Without the alternative of investing in bonds, wealth creation would undergo a boom, as a nation of free men went to work for themselves, instead of a nation of slaves dragging their feet under economic oppression (bonds) as we have today.

Imagine if you could not borrow.  You would have to live beneath your means.   The entire nation would be forced to be savers and/or investors.  You would have no need whatsoever to worry about any “credit rating,” because borrowing would simply not be an option.  You would have to live with your parents, or with your friends, or in a shelter until you could save enough to be able to buy, or build, your own home.  (Another option might be that you could live in a tent until the time came to afford a home.)  Such a way of life would surely create within a person the incentive to work.  It would create the incentive among young people to work hard to obtain their freedom from their parents that home ownership gives.

And of course, without usury, and without excessive home loans available to buy homes and land, then land prices would be extremely cheap compared to today.  Most people today pay up to three times the sale-price of their home as a result of a 30-year loan at interest, due to the interest alone.  And with land grants, you might get land for free, just as the Israelites did, and just as those who settled the West in the U.S.A got free land.  Without debt and without usury, you would probably pay less than 1/10th as much as people pay for homes today.

With home prices less, and land values less, commercial real estate would cost less too.  What business would not be more able to prosper if land cost less?  Indisputably, it would help all businesses, except for the real estate speculator, who rides the wave of excess and economic distortion created by the class of usurers.

And if businesses would be helped due to lower land prices, and more money available to invest in businesses (without the competition of bonds), then the economy would be greatly helped.

But usury is not even required by those who loan money in the first place!  Shocked?  It’s true.  For over 100 years the United States was on a gold standard, and productivity of society increased, and prices decreased.  Therefore if you loaned out money at zero interest, then by the time you received your money back, you could buy more with your money due to the constant price deflation, and improved economy!  

It is said that those who loan money need the interest due to inflation and due to the time value of money.  But this is like saying criminals need to commit crimes in order to make money, so it’s ok!  No, it’s not ok.  No, inflation is not a given.  And no, money tomorrow certainly can be worth more than money today if society is using honest money. 

So, what about banking?  Banking, as practiced today, is a criminal monstrosity of the ugliest proportions. The reality is that the Bankers have been bankrupt ever since they thought they needed a central bank to bail them out.  Depositors (the lenders) are told lies, that they can withdraw their money at any time, but the reality is their money is loaned out.  If people want to invest their money in an enterprise, they should be free to do so on their own.  There is no need to resort to trickery and fraud to take their money away from them through this banking scheme that has developed. 

Why should depositors be paid 2% and the bankers loan the money out at 4% and let the bankers pocket the difference?  If the bankers are the middle men, let the bankers be paid as middle men, and let the bankers collect a small commission as they introduce the depositor (capitalist) to the borrower (business), and let the depositors invest like everyone else if they want to invest.  At least this would be an honest transaction, and an honest way to do business to “put the money to productive use”.

Appeals to greed, envy, and lust, (along with lies and misinformation) are the primary means to attempt to justify banking.  People greedily and falsely assert that capital goes to waste if it is not loaned out and put “to productive use”.  As if a loan is the only way to put money to use! And as if investing and saving are not valid alternatives! 

But capital (gold and silver) that is hoarded is being put to productive use.  First, it makes all the rest of the capital that exists that much more rare, and thus increases the value of the rest of the gold and silver in circulation.  Second, the side effect of hoarding gold, which makes gold more valuable, is to stimulate the production of more gold through mining and industry, which provides jobs, and creates more wealth.  Yes, even hoarding gold provides jobs and creates more wealth! 

Yet mining is disparaged as a waste of time when money can be produced so efficiently with a printing press.  So, what use is it to spend so much time and energy to mine precious metals in the fist place?  What societal benefit is there to creating a gold boom through lack of gold and hoarding?  Gold keeps men honest.  Gold and silver force honesty in economic transactions, whereas paper money is economic fraud, an abomination, an unjust weight and measure, oppressive, unjust, counterfeit, and criminal.  Any industry that forces the rest of men in society to behave honestly (and without the use of force or threat of force) is the most valuable industry that a productive society can have.

Therefore, hoarding gold boosts the value of gold, stimulates mining, and increases the honesty of society.  None of that can be bad except in the eyes of the man who has set his eyes to envy the hoarded (and so-called unproductive) gold of the honest man. 

I do not think that if depositors owned their banks, as Tlaga suggests, that it would solve the problem.  The problem is usury, and that problem does not go away simply if ownership of the debts is changed.

So, how could society eliminate the problem of usury?  Surely the failed war on drugs has shown us that making an activity illegal does not stop the activity from happening.  Therefore, I certainly do not suggest making usury illegal, nor do I suggest the prosecution of people who decide to engage in borrowing or lending at interest.  There is simply no need to make it criminal at law to engage in the criminal act of lending at interest or borrowing at interest.  I’m not suggesting that government force be used to force my economic ideas on the rest of the population. 

Society and government could eliminate usury very simply and easily by refusing to recognize the validity of usurious contracts when it comes time to call on government help (the appeal to a judge) for enforcing them.  Loan sharks, (shady underworld types who loan at extremely high interest rates), cannot appeal to government help when it comes time to collect, so why should any other lender at interest have that ability?

The government already refuses to recognize contracts of fraudulent nature.  Contracts engaged under duress are not enforced.  Contracts for slavery are not enforced.  Therefore, there is no reason that government should enforce contracts containing a usury clause.

Judges are supposed to establish justice.  Usury is not just, nor is it good for society, it’s as simple as that.

Lucky for those living in the United States, we already have a system very similar (if not identical) to the one I propose, but very few people take advantage of it, although more and more are doing so every year.  Bankruptcy judges are the highest judges in the land; they overrule all others.  And almost anyone can wipe their debts clean with a simple appeal and declaration they wish to be free from debt.  Supposedly, you can only declare bankruptcy every seven years.  Interestingly, and I do not believe this is a coincidence, slaves were to be set free every seven years according to Bible law. (Deut 15:1-3)  Doesn’t that help prove the point that being in debt is like enslavement?  If you are in debt, you can claim your freedom by declaring bankruptcy.

What I am proposing is certainly a radical idea.  Some will condemn it as immoral, because they will feel people should live up to their agreements to pay back debt.  Others will say what I’m proposing is immoral because restricting lending would be restricting the freedom to engage in lending money.

So, to rebut such claims, I have to establish whether or not there is a solid moral justification for improving society through freedom from usury.  I believe there is.  It is contained within Jewish law, Islamic law, and also Christian doctrine.  Since most Americans are of one of many different Christian religions, and since Christianity is my religion, I will focus on Christian doctrine for the next two paragraphs of this essay, and how it relates to the topic of borrowers and lenders at usury.

Surely some sincere Christians will want to know if all the Old Testament laws against usury even apply to them anymore, since they may feel that the old laws were abolished, and that now, Christians have freedom in Christ.  Yes, let’s focus on that freedom, shall we?  Paul writes in 1 Corinthians 7:23, “You were bought at a price; do not become slaves of men.” I think that’s clear enough that Christians must avoid going into debt, and avoid usury.  Furthermore, you are in debt, you are “serving money,” because servicing the loan has become a requirement of you.  Being in debt means you have a new master, as you have enslaved yourself through usury to something other than God.  A Christian cannot have two masters.  Avoiding debt usury means no home loans, no car loans, and no credit card loans.

But can Christians loan money at interest to others?  I think this issue is more strict for a Christian than for a Jew, since Christians are commanded to love their enemies, and are commanded to bring freedom and the gospel to mankind.  Therefore, a Christian cannot really loan money at interest to a foreigner (whereas there is allowance for a Jew to lend to a foreigner).  Yes, I’m saying that I believe it is most likely immoral for a Christian to own a checking account bearing interest, or to own a savings account bearing interest, or to invest in a CD, or to own a Treasury Bill, or any Bond.  And yet, few Christian denominations (except the Amish who don’t use social security numbers) will preach that it is immoral to have a savings account bearing interest, even though the process of doing so would make one a usurer. It’s more widely recognized that Christians are not to engage in criminal activity, fraud, or extortion.  (Usury is compared to extortion in Ezekiel 18.)

A few months ago, I was getting ready to write an article rebuking and chastising bond-holders as being deceived fools for holding a paper promise to receive more paper.  Today, however, I realize that’s high praise compared to my views now.  Now, I realize bond-holders are usurers.  Therefore, I feel no pity for their increasing losses as the dollar collapses.  They get what they deserve as the bond market collapses, and gold and silver rise in value.

For anyone who is in debt, I would recommend that you declare bankruptcy.  If you have a home loan, put your home up for sale, pay off the loan, take the equity, and buy physical silver, and rent or live with friends or family in the meantime.  One day, you should be able to buy a house with a “bag” of $1000 face value 90% silver coins dated 1964 or earlier.  In 1980, a “bag” of 90% junk silver sold for about $25,000, at $35/oz., which could have bought a modest home.  Today, you can buy such a bag for under $5,000. 

For the banks, I would recommend that they declare bankruptcy too.  Go away, banks, and leave our society alone.  “Laissez faire!” We’re better off without the banks enslaving our people at usury.  We don’t have laissez-faire capitalism as long as the government is enforcing fraudulent debt contracts at any interest rate.

If you want to get out of bonds, and invest into a productive enterprise that will help to solve the problem of the scarcity of silver, you should consider investing in silver stocks.  The rate of return isn’t guaranteed, but it’s been a spectacular 314% for the year 2003 for an average of 80 silver stocks.  That’s right, three hundred and fourteen percent gains for 80 silver stocks, on average, in 2003.  That’s not a misprint.