So it turns out the new Pope is just like me, but infallible!
Or at least he thinks like me when it comes to money issues. I read parts of his latest exhortation, and I was overjoyed to hear his take on things, for example:
“How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points? This is a case of exclusion. Can we continue to stand by when food is thrown away while people are starving? This is a case of inequality. Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape.“
I like this part, too:
“…some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting.”
And of course, the headline quote, which is that “Money must serve, not rule!”
On Facebook, I posted a link to an RT article on this apostolic exhortation today and suggested that perhaps the Pope should issue a bull restoring the Church’s ban on usury, which became absolute in 1311 by order of Pope Clement V. And this meant “usury” in its original and actual sense, i.e., charging of any interest, not just excessive interest. I suggested that if Pope Francis were to do something like that now, it might help end the Fed in particular and central banking in general.
It is interesting to note then, that the Fed itself has essentially banned usury (again, in the original sense) with its “zero-interest rate policy,” or ZIRP. There are many problems with ZIRP, of course, but for me, the most galling one is the fact that under ZIRP, banks can get money for free, but regular people cannot.
This is the “economic apartheid” or “interest rate apartheid” that Max Keiser frequently refers to, and the effects of this grossly unfair–and I would argue, immoral–policy do not escape the notice of the Pope.
(Go to approx. 5:44 in the video for discussion of “interest rate apartheid”)
Indeed, the Pope points out that:
“A new tyranny is thus born, invisible and often virtual, which unilaterally and relentlessly imposes its own laws and rules. Debt and the accumulation of interest also make it difficult for countries to realize the potential of their own economies and keep citizens from enjoying their real purchasing power.“
The problem is interest on money created from thin air
The only way that one can possibly justify the charging of interest is if one fundamentally misunderstands how money is created. If one is laboring under the false yet widely-held belief that banks lend depositor’s money, one thinks that interest is completely OK because the bank is having to go without the use of the amount of the loan until that loan’s maturity.
However, if one understands that money is created out of thin air, one can see that what we now blandly refer to as “interest” is nothing but free money for those who have been able to position themselves as “lenders.” Indeed, creating money from thin air is not “lending” in any normal sense of that word and when viewed from this perspective, it is clear to see that interest is no different from just plain theft. Here’s economist L. Randall Wray on the fact that money is created from thin air (very straightforward, non-wonky discussion):
“It is the Fed that brings the wheelbarrows of cash to the banks—NOT depositors. And the Fed supplies cash NOT so that banks can make loans. Rather, the cash is to cover withdrawals from deposits.
Oh, where does the Fed get the reserves it credits to bank “checking accounts” at the Fed? Out of thin air—keystrokes. Where does the Fed get the green banknotes it trucks to the ATMs? Out of thin air—keystrokes instruct the printing press to print more.
Do you notice a pattern here? Money is always created out of ‘thin air’.”
This is the only discussion worth having these days, as the dollar dies and the failure of the economy is a mathematical certainty. Glad to see the Pope bringing it up and defending the victims of this theft–to my knowledge, no other significant world leader is doing it.