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Interest - Our Invisible Slavery

October 13, 2010

by Anthony Migchels
(excerpt by

Let's say you want to buy a house and go the bank and get a loan. Say 200k. The simple truth is, after thirty years you will have payed back 600k. 200k for the principal and 400k (!!) in interest.

Now this might be ok, or at least somewhat understandable, if you were borrowing this money from somebody else, who has been saving it. But as we know, this is not the case. The money is produced the moment the loan is granted by the bank. In a computer program. By pressing a few buttons.

So basically you pay 400k interest for pressing a button. Granted, the bank needs to manage the loan during the time it is being repaid. But the cost for this is still only a fraction of the income they get through the interest.

Now, we could stop here, because it is clear that the bank is ripping us off, also in legal terms, although they make the laws themselves, because there is no realistic service being delivered for the money.

But there is so much more, we must continue.

When the bank creates some money by giving you a loan, it takes the money out of circulation when you repay. Repaying debts means a diminishing money supply. The banks only provide the principal, in our previous example 200k. But after thirty years, 600k has been repaid and only 200k was created. So how can this be? How can 600k be repaid by 200k?

It can't. Somebody else needs to get into debt to create sufficient liquidity to pay the 400k interest. And the borrower of the original loan must start competing for this liquidity with everybody else to obtain that, intrinsically scarce, cash.

This means that because of the combination of debt and interest, the money supply must grow forever. But we know that a growing money supply is the definition of inflation and that inflation is closely linked to rising prices.

So inflation is inherent in the system. This sounds strange, because Central Banks raise interest rates to lower inflation, reasoning less credit will be issued because of rising prices for it. But the higher the interest rates go, the more money must be created to pay for this interest.

Just one of the perverse side effects of interest in the current wealth transfer system we call 'finance'.

So what of it you think. I was raised to be conservative in these matters and one should simply not get into debt, so you won't pay interest.

Wrong. Not only because if nobody went into debt, there would be no money, but because companies go into debt to finance their production. They pay interest (capital costs) over these loans. And like any cost this must be calculated into the prices they ask for their goods and services.

And what percentage of prices can be related to interest? It depends on the kind of business, particularly how capital intensive it is. Going from 12% for garbage collection to 77% for renting a house. All in all about 40% of prices can be traced back to costs for capital. These figures have been corroborated by an independent study done by Erasmus University, Rotterdam, the Netherlands under the supervision of STRO, a leading monetary think tank in the Netherlands.

So, you lose 40% (!!!!) of your disposable income to interest through prices.

Interest is being paid by people borrowing money and received by people having loads of it. So it is per definition a wealth transfer from poor to rich.

It transpires, that about 80% of the poorest people pay more interest than they receive to the richest 10%. The next richest 10% pay as much as they receive. This means the vast majority is losing a substantial part of their money to interest. The richest own the banks or have a lot of money there.

We must keep in mind that this is totally for nothing, since most of the money is printed at the time it is loaned out.

How much money are we talking about? I have only figures for Germany, but reason suggests it is basically the same everywhere.

In Germany the poorest 80% pay 1 billion Euros in interest to the richest 10% PER DAY. Yes, that's right, one billion euros per day. That is a grand total of 365 billion euro's per year. That is one seventh of German GDP and extrapolating this to America, the poorest 80% must be paying at least a trillion a year.

It conclusively explains the old adage that the rich get richer and the poor get poorer.

This is the hidden tax that nobody is talking about.

This is the yoke that we carry.

This is the worst kind of slavery, because it is slavery without even realizing it.

This is interest and let it never be forgotten.

This is our mortal enemy and let us never take our eyes of it again, until it is thrown into the fire of hell, together with the usurers enslaving us with it.

--Complete article can be found here:

"On Interest" by Anthony Migchels

Margrit Kennedy is saying exactly the same thing, in this must-see video from Germany:

See also


A History of Usury

If you have a comment you want considered for posting, send it to

Scruples - the game of moral dillemas

Comments for "Interest - Our Invisible Slavery"

Pat said (October 14, 2010):


From the London Times (no date - but it was in Lincoln's time - during the civil war)
"If this mischievous financial policy (greenbacks) ... should become endurated down to a fixture, then that government will furnish its own money without cost. It will pay off its debts and be without debts. It will have all the money necessary to carry on its commerce. It will become prosperous beyond precedent in the history of the world. The brains and wealth of all countries will go to North America. That government must be destroyed or it will destroy every monarchy on the glob. (qtd. in Search's book)

This was in Jim Kirwan's The Star-Crossed and The Unfinished State of Israel.

Dick Eastman said (October 14, 2010):

Der liebe Professor Migchels,

Sie haben das Problem des Wuchers erklärt. Kein amerikanischer oder britischer Wirtschaftswissenschaftler ist intelligent genug oder ehrlich genug, um solch eine Analyse zur Verfügung zu stellen.

Sie sind gerade der größte lebende Wirtschaftswissenschaftler in den Augen dieses Amerikaners geworden.

Können Sie, die Welt überzeugen.

Mit freundlichem Gruß,

Loch said (October 14, 2010):

In your article "Interest- Our Invisible Slavery". it is mentioned that interest payments make up 40% of the total economic output of the world's economy.

If there were no interest, the planet's human population could slow down its economic output by 40%.

Imagine (if there really were such a thing) what the prohibition of interest would do for "global warming"!

If, at our current world population of 7 billion we are too many, imagine what the prohibition of interest would do! As of now, our 7 billions act is if they were 9.8 billions, since adding 40%, the cost of interest, we are destroying the planet at a rate 40% higher than we would if we did not have to service our debts!

The Law of Jubilees not only decreed that the land would return to its owners every 7 years, but that the land would rest ad lie fallow on the 7th year. This law was never kept, and the Israelites went into captivity because the land would enjoy her rest.

Moses law was the perfect environmental law. It is interest, usury, that has destroyed the planet, because we will, through greed, refuse to obey God.

The earth shall rest a thousand years, to enjoy her Jubilees which we refused to give her.

Homer said (October 13, 2010):

As my friend lobro (one of the wittiest and funnies men I've ever known) once observed ...

"when you have usury, who needs alchemy?"

Danran said (October 13, 2010):

The worse part of being a debtor nation is the fact that at some point when a foreign power owns enough of you that they begin to run you by proxy. Slowly the way things were always done gets replaced by a new and harsher set of standards and rules whether they make sense or not. Even if they are not in the best interest of the process of manufacturing, customer service or what have you. They cannot be seen to be benefiting the task but rather serve as a conditioning and control mechanism of the persons performing the tasks. When one asks why we are doing things this way the standard answer is, “That’s the way the company wants it done.” I.e., “We are just following orders.”

Though I have never been, a day of work in this day and age in the United States feels like a voluntary eight hour stint in a Chinese slave labor camp. Everything is completely and utterly controlled at all times including scheduled two fifteen minutes breaks and a half hour lunch. Spend an extra thirty seconds in the bathroom and one can expect a disciplinary action, even if you are pregnant or menstruating. No exceptions, no humanity. And for the most part, no pay. So most of the labor force sticks it out as long as they can take it then they go somewhere else where the process begins anew much to the delight of the employer who can higher a cheaper worker and catch a tax break for doing so.

The U.S. housing market has been the most perplexing to me as I could not see a benefit to lending institutions for pursuing foreclosures so aggressively. Common sense would imply that if you work with a homeowner to keep them in their home and collect some type of payment, even if it is reduced from the original amount of the first mortgage it would still be in the better interest of the lender to do so rather than to foreclose, evict and let a property sit unoccupied. For the longest time I have been waiting to see these homes be snatched up by a wave of foreign nationals and that we here in the U.S. would have an “Uh Ha!” moment insomuch as our occupiers would finally reveal themselves by outnumbering us in our own neighborhoods. And while some foreign nationals have moved in they have not come in the numbers that I had anticipated. Perplexed by this I put this question to a friend who I believe has hit the nail on the head, he said, “Dan, once they steal all the money and they have all the money, then they are going to start paying wages again and giving people credit again and the whole thing will start all over. And it’s more profitable for them to throw people out of their houses take them back at a discount and sell them back to them again just like they do with the stock market.”

Henry Makow received his Ph.D. in English Literature from the University of Toronto in 1982. He welcomes your comments at