by Alasdair MacLeod
Gold Money
Decades of interest rate suppression have resulted in debt traps in both public and private sectors which will destroy faith in fiat currencies. This leads to higher, far higher interest rates and the escape into gold is only just starting.
Throughout European history, there has been a dislike of interest rates. For the last two millennia this was reflected in Christian (and Muslim) bans on usury. But interest is charged by a lender for good reason. A lender is ceding possession of money or credit to another, losing the facility to turn them into goods for his or her own consumption. That is worth compensation, and economists call it time-preference. And then there’s the risk that the borrower might default on the obligation to repay. That’s worth something as well. The fact of the matter is that the compensation a lender of money is due can only be decided on a case-by-case basis between lender and borrower.