Usury, The Greatest Swindle Of All

In the previous two parts of this article we learned about the term "usury". In its simplest form usury is the loaning of money on which interest is charged. However, as with most things simple, we humans have figured out a way to make it astoundingly complex. So complex, and in fact evil, I believe it now rates as the greatest swindle of all time.

We also got a glimpse at the two most common forms of interest. Simple interest is the most basic of the two. It is a fixed amount one pays for the use of money or when financing the purchase of an item such as a refrigerator. One could argue the case that simple interest was a more or less fair fee to pay for the privilege of having today what one could in fact not afford to buy. However the days of simple interest are long gone.

In these modern times, we now enjoy compound interest. It's like simple interest on steroids. Someone once asked Albert Einstein to describe the most powerful thing he had ever witnessed. In his wisdom, instead of the atomic bomb, he simply said, "compound interest".

Compound interest takes usury to levels never dreamed of by its ancient inventors. Compound interest is the evil master that enslaves millions of us today. It guarantees that the rich will get richer while the rest of us will for the most part never experience anything even approaching wealth.

We are all living in what I consider to be the decline of the Golden Age of Usury. With its decline may well come the end of modern civilization as we know it. And while many will perceive this as a bad thing, I say it is in fact good news!
Why? Because we of today have become willing participants in a huge scam the likes of which could only be subject matter for the wildest flights of fiction! Except the scam is not fiction; it is real.

Usury is at the very heart of this swindle, the roots of which stretch all the way back to ancient Assyria, Babylon and Egypt, some 3000 years ago. But those early practitioners of the art would simple not be able to conceive of a society so gullible as we. They would not be able to dream of a place where usury could rise to such heights as we have allowed it to rise.

It is my theory that all things may only go up so high, however, before they must ultimately begin to fall. And this, the time I call the Golden Age of Usury is already beginning to unravel; the cracks are evident in the great dam holding back the ocean of credit upon which floats our so called great economy. Soon it is bound to come crashing down upon all our heads like a sea of endless greed pouring forth to wash away the illusion of our prosperity.

And yet there is hope that once the chaos subsides, perhaps there will again be a new time of fiscal sanity and peace of mind. One can hope.

If this is the Golden Age of Usury, two things have made it so. The first is of course compound interest. The second is the infamous "credit card".

Believe it or not, I remember a time when there were no credit cards. Perhaps you do to. Initially they were not too dangerous. In fact the first kind of charge cards were just used to identify persons allowed to charge things and pay for them at the end of the month. There was no interest involved.

Diners Club and American Express issued the first charge cards in the USA in 1950. That was the year "plastic money" was born. Then, in 1951, Dinners Club took the next logical step. They issued real credit cards to 200 people allowing them to charge meals at 27 restaurants in New York City. These customers were given a credit limit with the option of paying all of their balance each month, or not. Interest was charged for any balance that was not paid in 30 days. And thus began what I call the Golden Age of Usury.

I do not intend to name names in this article. However, a person recently went to his grave who I feel fathered the Golden Age of Usury. He perfected the credit card idea and gave you and I and the masses the opportunity to engage in consensual monetary enslavement. It is true that we do it to ourselves, but he made it so easy for us, how could we help ourselves?

In 1958 his financial institution, Bank of America, issued the now infamous "BankAmericard". Today we know it as the "Visa Card". By 1965 he had managed to voluntarily enslave only five million people. He wanted more, millions and millions more. But oddly enough, the masses still didn't quite understand what a credit card was. (To my mind, they still don't, but never mind.)

To help them get the picture, the bank formed the "Bank AmeriClub". They hired and army of idiots to knock on doors selling memberships. Even people who never would understand the concept of a credit card knew all about joining clubs. And many of them liked the idea that joining a Bank Club that gave one special privileges. Of course you got your choice of the usual duck bill cap, T-shirt or mug; each with the club logo. However, one could also buy stuff in certain selected stores.

Best of all, with the BankAmericard, members had the privilege of paying for the stuff they bought any time they wanted, or so it seemed. Interest? Well of course, but we won't talk about that, will we?

I was a hippy and a war protestor and a university student in those days. A large part of the work force Bank Of America used were recruited from colleges and universities because students were supposed to be intelligent enough to explain the program and one could knock on doors at any old time of the day or evening; hence it was work you could do and still go to school.

I was one of the idiots the work-study office at our school sent out to sign up as a salesperson with Bank of America. I went. I received my sales kit and two hours of training. I spent a few happy evenings signing up innocents. I then retired forever from such disgusting undertakings. But not before I too had purchased a membership and hence become one of the enslaved.

By 1996, U.S. consumers had nearly 1.4 billion credit cards, which they used to charge $991 billion in goods. In addition to financial institutions such as banks, credit cards are also issued by department stores, oil companies, and specialty stores. One can even get "affinity"credit cards. These are issued through non-profit groups and churches; the organization then gets a tiny piece of the action each time the cards are used.

Today, it is a rare person indeed who does not have a fist full of credit cards, department store revolving accounts, one or more automobile loans and a big fat mortgage. This explosion of credit has had an enormous impact on the economy by completely changing our buying habits. It is now the norm to simply buy what one wants when one wants it regardless of what one can actually afford. So long as one has credit.

The question any sane person must ask, is where and when will all this credit madness end? Is there really a vast American market that is the envy of the world, or is it all just one big illusion like a giant soap bubble filled with hot air? Are we the richest people in the world, or are we flat broke? Here are a few bits of information that might help you decide.

In 2001 the Federal Reserve Board reported that the national balance on credit cards, auto, and other non-mortgage loans exceeded $1.58 trillion for the first time ever. Mortgage debt figures accounted for an additional $5.2 trillion in personal debt.

Not too many years ago, our total household debt equaled two thirds of disposable income. A recent Business Week report stated that household debt now exceeds 100% of disposable annual income. This means that on the average, our personal debt is greater than our resources; or to put it in simpler terms we aren't broke, but flat broke.

In lookng at the history of The Golden Age of Usury I have determined there are three phases. At the get go, people had money in the form of cash and savings, but they owned little personal property and few owned homes. They had very little debt.

As credit became the defining factor in our purchasing habits, we ushered in the heyday of The Golden Age of Usury. This was a time when people had equity in property, but little cash. They also enjoyed good credit sense.

Today we find ourselves in the final end-game phase of The Golden Age of Usury. We will soon see the decline I have alluded to throughout this article.

Here's why I think this will happen.

Currently our debt exceeds our personal income. The average person has eight credit cards with a combines balance of about nine thousand dollars financed at super high interest rates. Yet the prime interest rate (the interest banks charge their best customers) is exceedingly low. Mortgage rates are at the lowest level in decades. And thus the stage is set for disaster.

The only real worth people have today is the equity in their homes. The number of people who can actually buy anything with cash is growing fewer and fewer buy the day. Which is fine with the credit venders such as banks and other lending institutions. They are more than willing to keep handing out more and more credit. They especially love enticing people into "re-financing"their homes! And in doing so, they are killing the last flock of geese that can lay their eggs of gold.

Do most people merely refinance? No, they actually fall for the clap trap of borrowing on most or all of their equity at the sane time. This seems like a good idea because one can re-finance at low rate, get thousands of dollars and still have a payment that is significantly lower that ones "old mortgage payment."

This cash is supposed to be used to pay off credit card debt and so on. But what will generally happen is paid off credit cards will end up charged to the max again someday. And when that day comes the average American will not only be broke, but totally dependent on credit.

Worst still . . . instead of their previous lower balance on their mortgage . . . buy cashing out the equity, their balance due on their home is back to what it was when they first bought, or close to it.

Already we are awash in debt. Credit card interest and fees tripled in the 1990's reaching eighty billion dollars in 1998 alone! This is why the average American will continue to be showered with offers; there are over thirty thousand different programs offered to customers in any given year. Most are designed to enslave and encapsulate the wealth of consumers and to lay claim to even their future incomes; credit cards allow us to spend today money we will make years from now.

Is there any wonder that bankruptcies are rising at the rate of 16 to 18 percent each year? The current numbers stand at well over a hundred thousand people a month. Some lenders are writing off up to 17% of their outstanding loan balances and the number of people who have fallen behind on their credit card payments is now above 10%. The situation worsens as each month goes buy.

And now we see the beginning of the final blow. The Federal Reserve has begun to raise short-term interest rates again. This means that all those who refinanced their homes at low interest levels are going to soon begin to see their payments increase as interest begins going back up. Remember, their balance due is now two or three times what it was because they cashed out their equity! Thousands more will be forced into financial ruin.

Again I ask this one simple question: who can afford to begin paying cash for everything they purchase? Who can enjoy their current level of purchasing without credit? Yet when the penny drops there will be little or no new credit available.
The great American market is an illusion built upon credit. The average American is a slave who labors long and hard to pay the interest charged by our financial slave lords.

Isn't it time we declared our financial freedom? Today there are millions of people who are paying the minimum payment on credit cards charging 20% to 25% interest. This means that if they make a payment of $100.00, less than $5.00 each month is going toward their purchases and the rest is interest.

All of our wealth is going down the drain and filling the sewer-like coffers of a select few of the filthy rich. Just imagine the purchasing power you would have if you were not paying interest!

There is only one solution. I have done it and I urge you to do the same. You must concentrate on ridding yourself of every single penny of interest that you possibly can. Everything is negotiable. Contact your credit card vendors and demand a lower rate. Boycott those who will not comply.

Concentrate on paying off debt rather than purchasing more goods. At first this seems like the hardest of things to do. But in truth, what is the point of living and laboring if so much of the income you generate is lost to interest?

Beware of so-called "debt counselors"and "credit card consolidation"services. These are all owned by the banks they pretend to serve. I found I could do just as well or better on my own. One credit card vendor eliminated all interest and applied 100% of my payments to the principle. In this deal I agreed to pay the balance off and then tear the card up. I was firm and implied that I would pay nothing if they decided not to work with me. Again, everything is negotiable. You just need to be firm and let them know you are not going to play by their rules any longer; you are going to be free.

By hook or by crook, eliminate any and all debt that incurs interest. Above all, it is important to avoid incurring additional debt except for such things as your home and automobile. If you don't have the cash to buy the other things you need, they do without until you do have the cash.

Purchasing goods via credit cards and then spoon feeding the balance by making the minimum payment is complete insanity. It is like me telling you that you may purchase a washer and dryer, but only if you are willing to pay two to four times the price.

In our home we have a box. We make payments to the box and then use this money to pay cash for things like appliances, electronics and so on. By paying cash we can negotiate the best deals and save even more!

We have a credit card with a $1,500.00 limit that we use only for emergencies. Since the card has a low limit we can't get into much trouble with it yet the amount is large enough for our needs.

Credit cards are an addiction. Banks get us hooked on them at the earliest date possible. (They even have programs for students!) Most cards charge outrageous interest rates. The higher the outstanding balances and the more cards one gains, the higher the interest rates one pays. Add to this the annual fees and the late fees and the fact that the stores that accept credit cards also pay fees and a percentage of each sale to the credit card vendors and you must agree that only fools or worse would chose to use them!

Usury, or the charging of interest has been alive and well since ancient times. Compound interest and modern technology have combined to create the most perfect income producing cash cow this world has ever known: plastic money, or the common credit card.

Ironically it is this same powerful example of raw greed that both ushered in the Golden Age Of Usury and is at the same time sowing the seeds of its destruction.

When we were kids we used to hear the story about the goose that laid the golden eggs. One day someone killed the goose and ate it, not realizing what they had done. Little did we know that someday we would all grow up and become a gaggle of golden egg layers for the richest of the rich. Let us pray that we all come to our senses before our goose is cooked as well!

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