Crime Against Humanity: Debt Money, 3
Creditor: “Did you understand?” You: “Not much.” Creditor: “Very good. Just know that it’s for your own good.”
You think, “How could this be for my own good? Let’s see, the amount of interest is calculated on one unit of loan for one unit of time… Suppose he loans me ten quids: if after one time unit I repay him one quid, the interest I owe him for that time unit is calculated on the basis of ten quids, but the interest I owe him for the ensuing time unit shall be calculated on the basis of nine quids, and so forth. Therefore, if the total sum of all these partial interests were lower than that I’d pay in a lump sum for the whole loan and for its whole duration, and if I repayed him little by little, it could be in my own interest.
And it is now that the cat springs the mouse trap. Repay little by little? Well, the fourth trick is based on the previous three and it has to do with a sort of race between credit and debt. A fixed race.
One thing is the moment a debt is due, another thing is the moment it is repaid; between these two the debt is into arrears and a default interest is negotiated according to the balance of power in society. And that’s where the foundations for these tricks are laid: the interest on interest, known as compound interest or anatocism. Just to understand the province in which we are moving, the etymon of the word anatocism is rooted in the Greek term “tokismòs” which means “usury”.
Interest on interest, or compound interest, means an additional interest added to a previous interest, which can obviously start a cycle that repeats itself and grows into infinity. When and how exactly interest on interest can take place? Between the moment a debt is due and the moment it is repaid, indeed.
Suppose you have to repay a loan of ten quids plus ten percent interest, one quid, for one unit of time, and you don’t: now you owe eleven quids. You’d think straightforwardly that after the next unit of time you will owe those eleven quids plus one more quid for that additional unit of time. After all, the quids you have been loaned are ten, and the interest is calculated on these.
