by Jeff Nielson, Sprott Money:
We used to live in societies which observed the Rule of Law. Among the many great ironies and perversities of our social/legal devolution is this. Many of our fundamental principles of law (and justice) were such an integral part of our lives that they were taken for granted, and thus rarely discussed in explicit terms. Now, in the Corrupt West, many of these same principles of law/justice have been forgotten – seemingly erased by our lawless governments.
One of these elementary principles of law is the commercial doctrine of “consideration”. The premise and legal principle is a simple one. In order for any commercial transaction to be recognized as being legitimate (and thus legal), both parties to any transaction/contract have to derive some material benefit. In law; this material benefit is known by the name “consideration”. There must be consideration, on both sides of any/every commercial transaction.
At this point; many readers will already grasp that so-called “negative interest rates” violate the legal doctrine of consideration, and thus fail the test as a basis for any legal/legitimate commercial transactions. However, this merely scratches the surface when it comes to the degree to which our criminalized interest rates violate the Rule of Law. To fully appreciate the lawlessness of what our puppet governments are inflicting upon us (for the benefit of our Banker Overlords ), we need to delve further back into this litany of criminality.
The starting point in our descent into fraud and illegality with respect to our interest rate regimen is the so-called “0% interest rate”. There is no such thing as a “0% interest rate” or 0% loan. By definition; an interest rate is a positive number . It is the price we pay in exchange for the use of capital.
As has been explained previously ; what our corrupt governments call a “0% interest rate”, our Justice System (the real one) calls a “sham transaction”. We know this, in our two-tier societies, because if Ordinary People attempt to engage in the sham transaction of a “0% loan”, their transactions will be immediately subjected to legal scrutiny (generally by the Tax Man) and deemed to be null-and-void, as sham transactions.
Some readers will claim that this is not true. They will assert that “0% loans” and 0% financing are now common, legitimate aspects of our world of commerce, with automobile sales being a commonly cited example. Why can car-dealers offer “0% financing”, and not have these transactions nullified as sham transactions?
It is because these transactions do observe the legal doctrine of consideration. It is simply that these transactions have been disguised to create the illusion that the purchaser is getting “something for nothing” (i.e. free financing). Nothing could be further from the truth. The supposed “free financing” is merely an incentive to purchase, provided in lieu of other sales incentives.
If the same purchaser sought to purchase the same vehicle, but without the perk of “0% financing”, then instead of that incentive they would be given a choice of other freebies, to entice them to commit to such a major purchase. Alternately (and even more cynically) auto dealers simply – and secretly – raise their sticker-price on the car, so that there is no “free financing”.
The purchaser pays precisely the same amount for the vehicle by the time that the payments have been completed. All that has changed are the optics of the payments. Instead of paying “interest” over the months/years of car-payments, the purchaser is simply making larger payments of “principle”: the purchase price of the car. There is “no free lunch” in legitimate commercial transactions, nor in societies which observe the Rule of Law.
A so-called “0% interest rate” is a prima facie fraud. It is free money. The Federal Reserve, corrupt operator of the world’s “reserve currency” has been financing the U.S. monetary system, and the U.S. economy itself, through fraudulent currency. Of course the “0% interest rate” is just one of many Fed frauds. This is why this fraud-factory never allows any legitimate audit of its books.
Free money is fraudulent money, and thus illegal money. It is nothing more than a variation of counterfeiting , especially when combined with the institutionalized (but legal) fraud of “fractional-reserve banking” . The combination of so-called 0% lending and fractional-reserve banking renders a monetary system fraudulent and illegal, all by itself. It renders the currency of that monetary system worthless.
So-called “negative interest rates” are much, much worse. Borrowers stealing from lenders. Banks stealing from their depositors. Just as there is no such thing as a 0% interest rate, there could never be a legitimate concept known as a “negative interest rate”. This term is simply another banker-euphemism for more banker fraud/crime.
The enormous economic carnage which is caused by our regimen of such criminalized interest rates was the subject of the prequel to this piece. It was/is important to demonstrate this harm, from a legal standpoint. Why has the insanity/fraud/criminality of negative interest rates been inflicted upon us? Because (supposedly) we “need” this fraud for the sake of our economies, and thus our own best interests.
In legal parlance; such attempts at justification are called “public policy” arguments. Yes, the conduct in question is technically illegal, but because the conduct “serves the Greater Good”, we bend the rules and allow the conduct.
With the open criminality of negative interest rates, there is no Greater Good, merely greater and greater evils which flow from this monetary fraud, as (primarily) the Big Banks steal from anyone/everyone hapless enough to have some of their capital within the clutches of these financial pirates. A “negative interest rate” fails the test of legality, in several respects. There is no public policy argument of any kind which could mitigate in favor of this fraud, to even the tiniest degree.
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