Fiat is an artificial construct, as are asset values and prices, and the cost of capital/money. No one is guaranteed a rate of return. The whole point of monetary policy is to juggle the imaginary to realize a certain reality, ZIRP, NIRP, rapidly increasing PIRP, etc.

> No one is guaranteed a rate if return.

While true, I think it is fair that people broadly share an expectation that time value of money has a positive value and that central banks shouldn’t be subverting market forces to eliminate all opportunity costs of capital.

I think it’s crucial that this expectation should not be thought of as some sort of natural law. There is no requirement investment capital have value. On the contrary, one would expect the value of capital to continue to decline over time, especially due to structural demographic shifts.

It’s also the job of central banks to manipulate capital markets (“rows in a database”) to meet their mandates and desired outcomes.

https://www.visualcapitalist.com/700-year-decline-of-interes...

> Nobody should have the power to subvert the meaning of time.

Interesting take, but isn't setting an interest rate doing exactly that, whatever that rate is?

This is why, the Islamic approach is the most superior one: no lending money with interest, period. This means at least two things:

(1) Lending money becomes an act of charity, since you cannot profit off of it.

(2) You want to tap into time value of money? Invest it in a proper risk sharing manner that is fair to all parties engaged.

It would be a very different world had we implemented this approach.

Islamic banks still lend money for profit,they just charge a fixed fee. It's arguably less predatory, but also reduces availability of credit.

Time is valuable; holding money for a time has value. Interest is just recognizing that.

Imagining that folks will ignore that is futile.

The natural rate of interest is zero. Any positive interest rate results, in aggregate, in unserviceable household debts[1]. This is elementary for anyone with even a simple and accurate understanding of the US monetary system.

Usury is bad and there are other ways to finance underwriting and the other socially useful activities banks perform.

[1] Currency issuers can always service debts in the currency they issue of course. Those liabilities are so operationally different from household debts though that they probably ought to be called by a different name altogether.

Are you also proposing to get rid of rents of all kinds? If I buy a house/ship/combine with my $100k and rent it out rather than lend the cash to someone is that somehow better and now allowed?

If tangible assets have rental fees, then why doesn't money?

See Aquinas for details[1]. But in short usury is selling the same thing twice, which is immoral.

As an example, rent to own is a reasonable and moral way to structure a real estate transaction without interest. It’s all about sustainability. Lending at interest requires borrowers, in aggregate, to acquire more funds than the monetary system can provide. It’s clearly immoral to impose conditions that are impossible to meet.

[1] https://www.newadvent.org/summa/3078.htm