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Forum Post: Saving the planet means ending interest on money

Posted 6 years ago on Feb. 28, 2013, 2:28 p.m. EST by niphtrique (323) from Sneek, FR
This content is user submitted and not an official statement

Saving the planet is not possible without abolishing interest. When interest on money is charged, money in the future is worth less than money now. This has a major impact on investment choices. Interest promotes investments that are unsustainable and wasteful. If no interest was charged, sustainable investments would be more attractive. The following example comes from Poor Because Of Money from Strohalm:

Suppose that a cheap house will last 33 years and costs € 200,000 to build. The yearly cost of the house will be € 6,060 (€ 200,000 divided by 33). A more expensive house costs € 400,000 but will last a hundred years. This house will cost only € 4,000 per year. For two thousand euro per year less, it is possible to build a house that is not only more pleasant to live in, but will also cost less in energy use.

After going to the bank for a mortgage application the math changes. If the interest rate is 10% then the expensive house will not only cost € 4,000 per year on write-offs, but during the first year there will be an additional interest charge of € 40,000 (10% of € 400,000).

The long lasting house now costs € 44,000 in the first year. The cheaper house now appears less expensive again. There is the yearly write off of € 6,060 but during the first year there is only € 20,000 in interest charges. Total costs for the first year are only € 26,060. During the following years, lower interest charges still make the less durable house cheaper.

The example shows that without interest charges there is a tendency to select long-term solutions. Interest charges make long-term solutions uneconomical. This is also true on a larger scale. Natural resources such as rainforests are squandered because of a short term profit. Intelligent forest management could earn a profit for centuries to come but within the present financial system it can be more profitable to cut down the rainforest now and put the money in the bank to earn interest.




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[-] 2 points by antiusury (2) 6 years ago

any interest on money, otherwise known as usury, is theft. money is an abstract unit of measure, like the pound is for weight, to compare the relative value between objects; it has no absolute value. thus, charging interest is like putting a finger on the scale to alter the measurement. in our debt-based money system, banks have a finger on all scales since the usury is padded into the cost of everything in order to make a profit. usury was a felony for many centuries until now.

[-] 1 points by niphtrique (323) from Sneek, FR 6 years ago

People seeking profit is not the problem. Interest on money is problematic because compound interest is infinite in the long run. Assume that a 1/10 oz gold coin was put in the bank on interest in the year 1 AD on 4% interest. How much gold would there be in the account by the year 2000? The answer is: 3.6 * 10^31 kilogramme of gold weighing 6,000,000 times the complete mass of the Earth. Compound interest must be paid from debts. This is unsustainable and produces economic crises from time to time.

[-] 2 points by Middleaged (5140) 6 years ago

Prosecution and Suppression proves the US Congress is Fascist and will never oppose the Big Business Interests. The excuse of Strategic Positioning of Troops, Proving the Willingness and Ability of US Force, and the need to Bribe world leaders for strategic advantate totally fails in light of higher principals to protect Domocracy and Soverignty of Nations.

This is just as True concerning Securing and Exploiting Natuaral Resources.... Strategic National Interests/National Security is all about Natural Resources, Financial Risk, FInancial Corruption, Military Power, Military Alliances, and Currency & Petro Dollars.

Now we should end the wars, force our soldiers and airmen to station in the USA, close down bases in South Korea, Japan, Spain, Italy, Germany, Etc. What we are in 170 countries or something. And we spend more on weapons ... it is all just a scheme, a financial scheme that MIC Lobby sets up wars and contracts with DOD & Congress. But look we have great funding for our people, so take a look at the numbers.

Defense Vendor Payments 1998 = $95.6 Billion
Defense Vendor Payments 2011 = $394 Billion

DOD Federal Outlays 1998 = $256 Billion
DOD Federal Outlays 2011 = $680 Billion

Department of Education outlays 1998 = $43.7 Billion
Department of Education outlays 2011 = $245.6 Billion (500% increase)

Federal Highway Administration 1998 = $19 Billion
Federal Highway Administration 2011 = $44.8 Billion

Health and Human Services Grants (misc) 1998 = $37.7 Billion
Health and Human Services Grants (misc) 2011 = $101.9 Billion
Food and Nutrition Service (misc) 1998 = $ 13.7 Billion
Food and Nutrition Service (misc) 2011 = $ 95.7 Billion
Supple. Nutrition Assist. Program (SNAP) 1998 = $20 Billion
Supple. Nutrition Assist. Program (SNAP) 2011 = $77.6 Billion
Total Food and Nutrician Services 1998 = $33 Billion
Total Food and Nutrician Services 2011 = $102 Billion

Temporary Assistance for Needy Families 1998 = $13 Billion
Temporary Assistance for Needy Families 2011 = $18.9 Billion
Total Administration for Children and Families (HHS) 1998 = $32.5 Billion
Total Administration for Children and Families (HHS) 2011 = $54 Billion

Unemployment Insurance Benefits 1998 = $23.4 Billion
Unemployment Insurance Benefits 2011 = $117 Billion

Medicare 1998 = $210 Billion
Medicare 2011 = $552 Billion (no price controls)
Medicaid 1998 = $ 100 Billion
Medicaid 2011 = $ 269 Billion
Total Centers Medicare & Medicaid Services 1998 = $380 Billion
Total Centers Medicare & Medicaid Services 2011 = $1.095 Trillion

Federal Salaries (EFT) 1998 = $87.5 Billion
Federal Salaries (EFT) 2011 = $178.4 Billion

[-] 2 points by niphtrique (323) from Sneek, FR 6 years ago

This is not really on topic, but I will answer it anyway. Referendum laws like in Switzerland is what you need here. Only with a referendum law the citizens can be in control of their government. In this way the citizens can introduce legislation, reject legislation or remove officials from their position. A referendum can solve some important issues more effectively than the political debate and bargaining. For example, the health care debate in the United States became heated while opponents of the reform claimed to have a majority. A referendum could have taken the issue of the table, so the country could move on.

In Switzerland the citizens can overrule any decision made by politicians. If sufficient citizens support a referendum proposal then the referendum will be held. The government of Switzerland is obliged to act according to outcome of the referendum. Referendums do not make countries less stable or less governable. In most cases a referendum will lead to the best possible outcome as it makes use of the wisdom of crowds. It is a good idea to build in safeguards against small minorities starting a referendum about insignificant issues or issues being decided by insignificant turnouts.

Following the example of Iceland, building blocks of a new constitution can be written using crowd sourcing. The wisdom of crowds often surpasses that of experts so the result of crowd sourcing can be superior to the work of experts. The outcome of the Icelandic process could be used to speed up the process. Proportional representation is needed to create a multi party system and measures are needed to end the influence of oligarchs on the political system.

If there there is a referendum law, one house of Parliament suffices, and the Senate is outdated. After the new constitution has been written, and the essential reforms have been implemented, new elections for Congress can take place and the National Emergency should be ended. The President must leave office as he has been elected in the old political system. He may be reelected, another President may be elected, or there may be no new President.

[-] 2 points by Middleaged (5140) 6 years ago

Yes, you are right. I've posted twice last week on the Need for Referendums ... might have been on bensdad post about democracts being the only real party. He still believe that Obama, Kerry, and the new secretary of Defense will change foreign policy ... and set this country straight.

I agree I may not have read you post fully before posting. I may have thought you were talking about Interest groups.

Monetary Policy and Fiscal Policy today seems to be about expanding the money supply. QE1, QE2, QE3, TARP, Low Interest Rates or No Interest charged by Federal Reserve Discount Window or other lending programs at the Federal Reserve to provide TBTF Banks with liquidity.

I'm not an expert on this subject. I will try to look deeper into you post and learn a couple of things.

The Time Value of Money is the idea that the value of money changes over time. I suppose economist and bankers came up with all of the charts on present value of money and future value of money when they studied inflation. Inflation is about too many dollars in the economy making supply of resources scarce.

You may have seen some good videos on the Internet. One is a series called http://www.moneyasdebt.net/ Money as Debt. Another seems to be made in the UK ... both of these dig into the paying of interest and the expansion of money supply. One good point seemed to be as banks lend money, people take on debt, there is money that "Leaks from the System". The point was that consumers trying to pay back debt actually don't have enough money in the economy to beat the system and beat inflation. As consumers pay off debt inflation is ahead of them and their debt actually is a huge source of the inflation.

I might be missing or misunderstanding something there. But it is the Interest on Debt that expands the value of the Loan or expands the principal of the loan into a kind of Ponzi Scheme. Like perhaps my 30 year mortgage is paid back at double the value and the house may not be worth this inflated value ... but even if the house is valued at this 100% increase ... you have just created 100% Inflation.

It is very Provocative. And most of us probably don't understand this.

Actually this is a little girl in a Video explaining the same thing in a thrid video.

Referendums (National Votes) are the only Way to Stop War, Uphold the Constitution, Bring back free Speach, End Torrture and Rendition, Uphold the right to speedy Trial and to speak to a Lawyer, ... and to end the Corporate Influence, Corporate Lobby, and Corproate Preference in Local, State, and Federal Government. Also we need to stop paying interest to banks for Federal Loans which could be created by the US Treasury. AND We probably need to take power from the Federal Reserve ... maybe allow a Referendum to approve or disapprove of the US Currency Expansion.

[-] 1 points by niphtrique (323) from Sneek, FR 6 years ago

I might be missing or misunderstanding something there. But it is the Interest on Debt that expands the value of the Loan or expands the principal of the loan into a kind of Ponzi Scheme. Like perhaps my 30 year mortgage is paid back at double the value and the house may not be worth this inflated value ... but even if the house is valued at this 100% increase ... you have just created 100% Inflation.

Debt expansion does not need to produce rising prices. Debts have to be repaid with interest, so there is a constant shortage of money for debtors. It could be solved when depositors spend their money instead of leaving it in the bank at interest. The Keynessian solution is to let governments go into debt, to print more money, and to discourage saving (and to let people go more into debt). This creates more debts and more problems.

Another issue is that rich people do not spend all their excess money, and this keeps a lid on inflation. It may create asset bubbles instead. If the available money would distributed more evenly, then the prices of goods and services will rise.

Natural Money provides a solution for these problems because:

  • there is a stable money supply;
  • there is a holding fee on money;
  • there is a ban on charging interest.

The holding fee is an incentive to spend the money, invest it or to lend it out without interest, so the money keeps circulating, and debts do not grow because of interest. The stable money supply will make lending out money at 0% an attractive proposition as there is no inflation, and economic growth will lead to lower prices, so there will be positive real return on savings.


[-] 2 points by Middleaged (5140) 6 years ago

Good Webpage Layout. Compliments. Looks like I saved this website last year and did some websearches on money through videos to understand it better. I still have to read through your webpage though.

You make an important point. Wall Street, our Insurance Companies, and most US Career people seem to expect higher salaries, bonuses, and corporate promotions. I don' think that is an accurate assumption that we all will get higher salaries. Inflation pressures are coming from all directions... that is true. And it is coming out of Our US Banking System.

It is very ODD that we no longer get Interest on Individual Savings Accounts in the USA ... perhaps going back to the Dot.com Financial Crash. This is counter to the US Banking I learned as a Child. And 1 +1 = 2. It follows logically that if we have Inflation and little chance to get Interest on our Money without Casino Gambling or Competition against High Speed Computer Algo Trading or high Speed Wall Street Trading .... It Follows logically that US Savers are getting left behind by the Political Financial System.

[-] 1 points by niphtrique (323) from Sneek, FR 6 years ago

Thank you for the compliment on the lay out. It was kept simple so it would not distract attention from the message.

Negative real interest rates like we observe now are the consequence of the unsustainability of interest itself. If there are too many debts in the economy, then higher interest rates will crash the economy. Low interest rates will postpone or slow the decline.

It seems that I am working on a fundamental breakthrough. If Natural Money creates a more efficient economy, then it must be possible to overturn the current financial system and leverage this power to start political reforms, most notably referendums. This is why I am still working on Natural Money after four years time.

Casino gambling and high speed trading are another issue. They can be handled with trading taxes. For this to work, countries need to assert national sovereignty and regulate international finance and trade. National sovereignty is also needed to ensure that taxes are paid where profits are made.

This means, for instance, ending multinational corporations, and forcing corporations to list their stock on national stock exchanges. Only if countries can work together and harmonise their tax laws, it may be possible to have multinational corporations.

Some thoughts about reorganising the financial system can be found here:



[-] 1 points by niphtrique (323) from Sneek, FR 6 years ago

It is the reason why our economic system is destroying the planet.

So, we can worry about climate change and many other things, but they will not be solved unless interest on money is abolished.


[-] -3 points by danya8 (-98) 6 years ago

And what exactly are we "saving the planet" from? When will this apocalypse occur?

Sustainability is a religion, that tries to tie everything man does, to some life threatening environmental apocalypse. It's the "butterfly effect". By using a plastic bag from the grocery store, you are killing an endangered species in Namibia. .