Margrit Kennedy famously established that 45% of prices are related to capital costs. The more capital intensive an industry is, the higher this percentage becomes and no industry is more capital intensive than construction.
The incredible facts are these:
1. In construction a whopping 75% of prices are related to costs for capital. Meaning that if we buy a new $100,000 home, $75,000 is lost to banks and other financiers.
2. When we buy the house with a mortgage, we will not only pay $100,000 for the house, but an additional $150,000 in interest over 30 years.
3. So we pay a total of $250,000 for a house that actually costs no more than $25,000 to build.
The case against Interest can be no clearer than this. We get absolutely nothing in return for all this money.
It’s not just the Cathedrals: what would our homes look like without Interest?
Even at very low interest rates the loans quickly become punitively expensive. And leaves the monetary system intrinsically unstable to boot.
“Monetary reform” that does not address interest is a hoax.