4 Comments

Usury used to be considered illegal.

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Usury, like so many things, is generally in the eye of the beholder.

The problem arises when a few banks and lending institutions leverage market power to charge above-market levels of interest (classic "rent-seeking behavior") and co-opt government to give their shenanigans force of law. The Federal Reserve is, of course, the ultimate expression of that co-option.

If there are many small banks making loans, interest rates are held down by market forces. Instead, the Federal Reserve acts as the biggest lender of all by buying up securities of all kinds, thereby manipulating market interest rates.

It's not a system that can ever be self-sustaining (and arguably would have collapsed in the 1940s but for the economic black swan of WW2).

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I do not trust the “quasi legal Federal Reserve”

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Nor do I.

It would be one thing if the Fed were merely corrupt--that would be bad but manageable.. The problem is they are both corrupt AND stupid. Which means they are doing all the wrong things, for all the wrong reasons, and getting all the wrong results. The ultimate "heads everybody loses, tails nobody wins" scenario.

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