12
Jan
2014
“The Tension Between Economics and Religion”
The previous post reminded me that I touched on the familiar antipathy of Christianity to usury in my Lou Church memorial lecture at the Mises Institute in March 2006.
The previous post reminded me that I touched on the familiar antipathy of Christianity to usury in my Lou Church memorial lecture at the Mises Institute in March 2006.
I watched all 53 minutes. Bob you have been at this for a while, at least since 2006.
Today I think some people confuse lending with money. A loan is when you want to borrow somebody else’s capital in an attempt to enrich yourself.
Money is what you use to facilitate trade of goods and services(capital) you already own.
I want money, that is nearly free, for the purpose of conducting my day to day trades. It seems like money today cost about 2-5% which is way to expensive for something that is essentially free.
I want loans to cost me about 6% and I want the same or more when lending.
The prime rate is 3.25%. According to Peter Schiff and Ron Paul, inflation is currently 6%. That means money costs -2.75%. They are paying you to take it if you qualify for prime rate.
These days a lot more than interest rates factors into the cost of money. Many middle men. Much intervention. Tons of criminals. Taxes. Intervention.
Joe wrote: “The prime rate is 3.25%. According to Peter Schiff and Ron Paul, inflation is currently 6%. That means money costs -2.75%. They are paying you to take it if you qualify for prime rate”
Joe it has taken me few days but I knew there was something wrong with your calculations.
Lets say I borrow 100K and repay it to you during the next 30 years. Everything I purchase will be inflated in cost. Additionally I will owe you interest. SO really the money you loaned me is nowhere close to free. IF you really could loan me money at prime rather than prime plus, and there was no inflation, at minimum this money would cost me 3.25%.