In Holland they serve a drink called a ‘lichte angst’, a ‘slight fear’. In Cuba there is tremendous fear to speak truth to authority. Solidarism also has a fear, a mortal fear, namely that the double digit, sustained and worldwide growth it will unleash, will cause so much pollution, that we’ll all soon choke to death. That is why Rule 6 of safe money creation by the Central Bank reads: ‘Only green or environmentally neutral investments should be financed with newly created money’. We have no choice but to go green.
Solidarism also has a mortal fear of interest. For 2 reasons: a) it concentrates capital and thus economic power in the hands of a tiny elite and b) it causes inflation. Let’s examine this more closely. The average interest-rate on a mortgage-loan to buy or build a home in capitalist countries is between 6 - 10%. What this boils down to is that at the end of the mortgage period of say 25 - 30 years, the borrower will have paid back 2.5 to 3 times the amount borrowed. This means he will have paid 2.5 to 3 houses, instead of just the one he bought or built. Two houses ‘disappear into nothing’, so to speak. This ‘nothing’ is the bank, of course. The bank always has the last drink.
So, it’s as clear as Cuba’s Crystal beer how interest concentrates economic power in the hands of lenders (mostly banks), whereas the credit extended was created ‘out of nothing’ in the first place! Most credit (at least 90%) extended by banks is not their own, nor held for others (e.g. for clients who hold savings accounts with the bank). Most credit is created out of nothing by pressing a few computer-keys. So the bank creates non-existing money
first and then forces its borrowers to create money a second time by charging interest. Isn’t interest interesting?
Now, when the owner sells his house, he will try to recover his interest-loss, of course. If the market factor is ignored, his selling price will be approx. 3 times the amount he originally borrowed plus a profit, if he can. This makes it clear that the interest charged has an inflationary effect. And inflation in and by itself again contributes to the concentration of capital in the hands of the elite of capital owners. For all businesses always pass inflation on to the consumer, i.e. the mass of have-not wage-slaves who do not own any capital (this happens in socialist Cuba too, which is one of the reasons why Cuba is fighting a losing battle, unless it adopts Solidarism; for the wages the Cuban State pays - already at starvation level - will continue to erode due to forces Cuba cannot control, such as interest). So one can easily see why Solidarism fears interest and why Jesus and Mohammed were right after all.
What the Cuban Central Bank could do to solve (or avoid) the problem of interest - once Solidarism has been adopted -, will be explained in the next article. By the way, there is mortal fear in the U.S.A. that Cuba will in fact adopt Solidarism.