prudentinvestor

Punishing the Savers

But when usury was banned it was on real money, in gold or silver, and without income tax. In deflating fiat money, the real return to savers becomes zero when the nominal interest earned, less the income tax paid is equal to inflation.

So, with 4% inflation and a 33% tax rate, a nominal interest rate of 6% actually gives the saver nothing, so she is not guilty of profiting from usury. Further, with a nominal interest rate less than 6%, the saver is being robbed, and the penalty for robbery is harsh in some cultures that ban ususry!



On Jan 13 10:27 AM jan814 wrote:

> Console yourself with this thought. According to the Jewish, Christian,
> and Muslim religious traditions (which together are followed by most
> folk in the world), taking or receiving interest on a totally risk-free
> "investment" is the deadly sin of usury. (Basically the idea is your
> demanding payment while doing nothing at all is the worst possible
> kind of gluttony.)
>
> For further information there is a Muslim mutual fund called Amana,
> which follows the Jewish/Christian/Musli... rules, and which has
> done well during the last year compared to other funds.
>
> For 2000 years the three traditions have considered usury to be much
> the same as sodomy. (Because your interest is the reward for a sterile
> investment in the same way that anal-genital intercourse is sterile
> and does not produce children.). So if they aren't paying you your
> "interest," that means that you temporarily are somewhat less of
> a pervert than usual.