The Goldsmith opens Pandoras box

Many years ago, gold used to be the medium for exchange - money in other words. Now goldsmiths had excellent storage facilities, safe from most things, etc. So people would leave their gold at the goldsmiths and get a receipt in return. Now what happened was people started trading these receipts for other things, basically using these receipts as money. So the goldsmith gradually worked out that maybe he should start charging people a basic rate for usage of the facilities which he duly did.

Now the goldsmith got greedy. He realised that the receipt holders very rarely cashed in their receipts and retrieved their gold...so he decided to use this idle wealth for his own purposes: He started lending it out on interest. So now he was making a load of extra cash, none of the holders were any the wiser and the goldsmith bought himself a flashy new horse and cart...made out of pure gold (just the cart).

Now the goldsmith got even more adventurous (eyeing the platinum cart now), he decided that as the receipts were now accepted as money, why couldn't he just write receipts for gold he didn't have and lend that out on interest too. This resulted in a whole load of cash and the aforementioned platinum cart and the goldsmith was enjoying life. All the cash was flowing to him, he could just as easily destroy money which, when returned, would still be worth nothing, and he would basically rip it up and write a new one to dupe people with or just keep using that one. of course the interest was given to him in very much real money, so he was getting all of the "real" money which was actually worth something.

Now the people who had their money in the bank got suspicious and made what is known as a "run on the bank". They basically asked for their gold back...which the goldsmith had loaned out...thus the goldsmith went bankrupt. Life wasn't so rosy any longer.

Nowadays this so blatantly unfair system is practised legally by all the banks in the world (apart from some Islamic Banks), and even "runs" on the bank wont make a difference, because the Central Bank will just lend the bank money and get them out of their spot of bother. money is not backed by anything and is truly "worthless", hence the rising inflation rates we see.

There are a few incy wincy restrictions such as the reserve the banks have to have in comparison to the money they create and loan out on interest...such as it was 10% in the UK but is essentially down to less than 1% now. so for (using the 10% fractional reserve), £10 in the bank, £90 could be loaned out on interest.

This coupled with the scary fact that banks are the source of 95%+ of the money in circulation today, leads us to understand that the interest to be payable to the bank is only payable if the bank creates new interest fueled loans to pour into the economy, and to pay them we will need even more bank money with interest on top of that loan, and to pay that....

This vicious cycle will go on and on. Inflation, economy collapses and the boom and bust cycle can all be traced back to the abolition of the gold standard (not backing the paper money with gold), and by the adoption of fractional reserve banking.

We need to start to realise the crippling effects of interest in the society such as its widening of the rich-poor divide. And we should campaign for breaking of the yolk that the interest earning bankers have placed upon us, and look to establish an interest-free economy.

(My views find their origin in common sense and Islam, which forbids interest)