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On Average, 40% of the Price of ‘ALL Goods & Services’ is Going to the Banks in Interest.

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“Most of us assume that we only pay interest when we borrow money.” A CHANGING MONEY SYSTEM – by Prof. Margrit Kennedy

Three Misconceptions about Money

A further reason why it is difficult for us to understand the full impact of the interest
mechanism on our economic system is, that it works in a concealed way.

  1. Most of us assume that we only pay interest when we borrow money. Therefore, if we
    want to avoid paying interest, we think all we have to do is to avoid borrowing money.

2. What most people do not understand is, that every price we pay includes a certain amount of interest. The exact proportion varies according to the labour versus capital costs of the goods and services we buy. This ranges from a capital share of only 12% in garbage
collection, (because here the share of capital costs is relatively low and the share of physical

3. On the average we pay about 40% interest in all the prices of our goods and services. In
medieval times, people paid one tenth of their income or produce to the feudal landlord. In
this respect, they were better off than we are nowadays, where almost one half of each Euro
or Dollar goes to serve people who own capital.

Author: Prof. Dr. Margrit Kennedy, Ginsterweg 4-5, D ñ 31595 Steyerberg 21.10.2001

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