About Your Mortgage
On average, about half of any home mortgage payment is interest on money printed by the Federal Reserve. So it deserves to be asked "Upon what basis is it logically justifiable to charge interest on money not comprised of the savings of others?"
The interest payment on loans originated in a time when loans were other people's savings and the interest paid on the loan paid an incentive for a saver to provide their funds and for the bank to take the risk of loaning those funds. Today, the prime rate is so low, almost none of the funds loaned by banks are other people's savings. Anyone with money has it in the stock market and any money loaned by the banks is money printed into existence by the Federal Reserve. If the prime rate is 3%, the consumer pays an interest rate of 4% and the Federal Reserve collects an interest rate of 3%. For what? Printing the money? It's not like they are paying a saver 2% for the use of their savings. I assert that interest payments on printed money is not logically justified and the sooner the country examines this, the sooner we can reduce everybody's mortgage by half.
Of course the argument that is made is that the Fed uses interest rates to act as a governor on the economy. During a democrat administration, the prime rate is kept near zero for eight straight years to prevent complete economic collapse. But when a republican administration posts over 4% growth rates, we are told it is necessary to raise the prime rate to prevent an overheated economy. Never mind the fact the fact that China grew at 15% for years and is still at 6%. Logically, it could be argued that economic forces of supply and demand are natural unerring governors on economic activity and it is hard to imagine that everyone needs to pay a doubled mortgage payment to protect us from having an economic growth rate as high as China.
Imagine we lived in a non-digital, completely paper society and you inherited the job of controlling the supply of cash in your village. The way it was set up was that you would print paper money, give it to the banks, and they would give it to a home builder on the promise that the home buyer would pay it back with interest. Every month, the home buyer would give a bag of cash to the bank, which would then keep 10% and give the remaining bag of cash to you. On paper, you were responsible for burning that bag of cash so that the total amount of cash in circulation is reduced to offset the added cash in circulation resulting from the initial loan to the bank. So the $64 zillion question is "What are the odds that all of that returned cash gets burned, given that you are not governed in any way by any kind of oversight whatsoever?" For all the adults in the room, the answer is zero. That is simply too much temptation even for Jesus. After all, with that kind of money, you can buy a lot of power; tax free laundered cash.
The fact of the matter is the Fed is paid over $500B/yr in interest and no one knows where it goes. Even worse, every home owner is paying twice as much for their homes because of this 'necessary' interest rate on cash that has no underlying interest obligation. It's like the Fed has a copyright on money. They print the money, give themselves $20T in 'bonds', and collect interest on that printed money. It's like their holding the title for that money. For all the readers who question a doubled mortgage payment, I encourage all to call the capital switchboard at 202-224-3121 and demand that their senator support both an audit of the Federal Reserve and an explanation of why consumers are paid interest on printed paper.
The interest payment on loans originated in a time when loans were other people's savings and the interest paid on the loan paid an incentive for a saver to provide their funds and for the bank to take the risk of loaning those funds. Today, the prime rate is so low, almost none of the funds loaned by banks are other people's savings. Anyone with money has it in the stock market and any money loaned by the banks is money printed into existence by the Federal Reserve. If the prime rate is 3%, the consumer pays an interest rate of 4% and the Federal Reserve collects an interest rate of 3%. For what? Printing the money? It's not like they are paying a saver 2% for the use of their savings. I assert that interest payments on printed money is not logically justified and the sooner the country examines this, the sooner we can reduce everybody's mortgage by half.
Of course the argument that is made is that the Fed uses interest rates to act as a governor on the economy. During a democrat administration, the prime rate is kept near zero for eight straight years to prevent complete economic collapse. But when a republican administration posts over 4% growth rates, we are told it is necessary to raise the prime rate to prevent an overheated economy. Never mind the fact the fact that China grew at 15% for years and is still at 6%. Logically, it could be argued that economic forces of supply and demand are natural unerring governors on economic activity and it is hard to imagine that everyone needs to pay a doubled mortgage payment to protect us from having an economic growth rate as high as China.
Imagine we lived in a non-digital, completely paper society and you inherited the job of controlling the supply of cash in your village. The way it was set up was that you would print paper money, give it to the banks, and they would give it to a home builder on the promise that the home buyer would pay it back with interest. Every month, the home buyer would give a bag of cash to the bank, which would then keep 10% and give the remaining bag of cash to you. On paper, you were responsible for burning that bag of cash so that the total amount of cash in circulation is reduced to offset the added cash in circulation resulting from the initial loan to the bank. So the $64 zillion question is "What are the odds that all of that returned cash gets burned, given that you are not governed in any way by any kind of oversight whatsoever?" For all the adults in the room, the answer is zero. That is simply too much temptation even for Jesus. After all, with that kind of money, you can buy a lot of power; tax free laundered cash.
The fact of the matter is the Fed is paid over $500B/yr in interest and no one knows where it goes. Even worse, every home owner is paying twice as much for their homes because of this 'necessary' interest rate on cash that has no underlying interest obligation. It's like the Fed has a copyright on money. They print the money, give themselves $20T in 'bonds', and collect interest on that printed money. It's like their holding the title for that money. For all the readers who question a doubled mortgage payment, I encourage all to call the capital switchboard at 202-224-3121 and demand that their senator support both an audit of the Federal Reserve and an explanation of why consumers are paid interest on printed paper.
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