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Perhaps its my lack of perspective having lived only the in the US, but I'm trying to get my head around how an economic system without usury/lending would function. Perhaps someone can provide an example?

And, yes, perhaps its not fair to equate lending with usury as the common definition of the latter is essentially that its lending with unreasonably high interest rates. But that definition is squishy. What is "unreasonable"? Surely some interest is warranted as the lender is taking risk?

Looking forward to the comments on this one. :D

Perhaps its my lack of perspective having lived only the in the US, but I'm trying to get my head around how an economic system without usury/lending would function. Perhaps someone can provide an example? And, yes, perhaps its not fair to equate lending with usury as the common definition of the latter is essentially that its lending with unreasonably high interest rates. But that definition is squishy. What is "unreasonable"? Surely some interest is warranted as the lender is taking risk? Looking forward to the comments on this one. :D

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[–] • 0 pt

I've been thinking about this a lot. It's not usury that's the problem, it's the reserve requirements.

Example: 3 entities; home buyer, home builder, bank. The home builder builds a house, the home buyer buys a house from bank lender, the builder deposits the money in bank. With a central bank there is only one bank. So the buyer gets a check from the bank, gives it to the builder, then the builder deposits that same check back with the same bank. Something from nothing. This multiplies money. The system acknowledges this happens, and set reserve requirements so that banks can't inflate us out of existence. Given the opportunity they would inflate indefinitely, they would.

So the reserve requirements are 10%. That means that banks can loan 10 times more than they have. If we simply said you can't loan more than you have in deposits, 100% reserve requirements, then this nightmare would end overnight. This is the root of our problems.

[–] [deleted] • 0 pt

I've often heard of inflation referred to as "silent theft". This aligns with your scenario.

I've heard that the US banks have a zero reserve requirement as of a few years ago. Seems like that's be a real winner. /s