Heterodox
116-426: Usury ( / ˈ j uː ʒ ər i / ) is the practice of making loans that are seen as unfairly enriching the lender. The term may be used in a moral sense—condemning taking advantage of others' misfortunes—or in a legal sense, where an interest rate is charged in excess of the maximum rate that is allowed by law. A loan may be considered usurious because of excessive or abusive interest rates or other factors defined by
232-496: A Jewish Christian and was persecuted by other members of the community for doing so, the cavalcade in which he was marching persecuted his persecutors in turn: The participants in the procession then made an attack "which destroyed [the synagogue] completely, razing it to the grounds." Subsequently, Bishop *Avitus directed a letter to the Jews in which he disclaimed the use of compulsion to make them adopt Christianity, but announced at
348-448: A wealth effect . Additionally, international interest rate differentials affect exchange rates and consequently exports and imports . These various channels are collectively known as the monetary transmission mechanism . Consumption, investment and net exports are all important components of aggregate demand . Consequently, by influencing the general interest rate level, monetary policy can affect overall demand for goods and services in
464-634: A Roman Catholic veil. In addition, Catholicism was syncretic, absorbing other traditions and creating a new creole religion. The traditional Festival of Santa Esterica was preserved among the Conversos who migrated to the New World and is still practiced today among their descendants. Some of the Sephardic Jews expelled from Spain went to Portugal, but in 1497 that country effectively converted all remaining Jewish children, making them wards of
580-513: A ban on interest charges also argued for the legitimacy of lucrum cessans profits (e.g. Pierre Jean Olivi and St. Bernardino of Siena ). However, Hostiensis' exceptions, including for lucrum cessans , were never accepted as official by the Catholic Church. Pope Benedict XIV 's encyclical Vix Pervenit (1745), operating in the pre-industrial mindset , gives the reasons why usury is sinful: Interest rate An interest rate
696-404: A bank to buy assets for its business. In return, the bank charges the company interest. (The lender might also require rights over the new assets as collateral .) A bank will use the capital deposited by individuals to make loans to their clients. In return, the bank should pay interest to individuals who have deposited their capital. The amount of interest payment depends on the interest rate and
812-588: A bribe against the innocent. He that doeth these things shall never be moved. Johnson contends that the Torah treats lending as philanthropy in a poor community whose aim was collective survival, but which is not obliged to be charitable towards outsiders. A great deal of Jewish legal scholarship in the Early and High Middle Ages was devoted to making business dealings fair, honest and efficient. As Jewish people were ostracized from most professions by local rulers during
928-402: A certain sense of complacency amongst some pension actuarial consultants and regulators , making it seem reasonable to use optimistic economic assumptions to calculate the present value of future pension liabilities. Because interest and inflation are generally given as percentage increases, the formulae above are (linear) approximations . For instance, is only approximate. In reality,
1044-473: A fraction came from northern Iberia and that some possibly had a Sephardic origin". Medellín has a tradition of the marranada , where a pig is slaughtered, butchered and consumed on the streets of every neighborhood each Christmas . This custom has been interpreted as an annual affirmation of the rejection of Jewish law. A safe haven destination for Sephardic Conversos during the Spanish colonial era
1160-600: A large expedition to New Mexico in 1591 in an effort to establish a colony. Castaño was arrested for this unauthorized expedition and sentenced to exile in the Philippines . The sentence was later reversed, but he had already been killed in the Molucca Islands when the Chinese slaves on his ship mutinied. Governor Carvajal, his immediate family members, and others of his entourage were called to appear before
1276-475: A loan is considered a form of Tzedakah or Ṣedaqah ( Hebrew : צדקה [ts(e)daˈka] ), a Hebrew word meaning "righteousness" but commonly used to signify charity . (This concept of "charity" differs from the modern Western understanding of "charity". The latter is typically understood as a spontaneous act of goodwill and a marker of generosity; tzedakah is an ethical obligation.) In the Rabbinic period ,
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#17327721823921392-527: A man wanted to sell wine separately from the use of the wine, he would be selling the same thing twice, or he would be selling what does not exist, wherefore he would evidently commit a sin of injustice." Charles Eisenstein has argued that pivotal change in the English-speaking world came with lawful rights to charge interest on lent money, particularly the 1545 act, "An Act Against Usurie" ( 37 Hen. 8 . c. 9) of King Henry VIII of England. During
1508-416: A month or a day, but they are usually annualized . The interest rate has been characterized as "an index of the preference . . . for a dollar of present [income] over a dollar of future income". The borrower wants, or needs, to have money sooner, and is willing to pay a fee—the interest rate—for that privilege. Interest rates vary according to: as well as other factors. A company borrows capital from
1624-446: A monthly basis, and the most common rates were multiples of twelve. Monthly rates tended to range from simple fractions to 3–4 percent, perhaps because lenders used Roman numerals . During this period, moneylending primarily involved private loans given to individuals who were consistently in debt or temporarily so until harvest time. This practice was typically carried out by extremely wealthy individuals willing to take on high risks if
1740-514: A position to take advantage of the situation became the moneylenders when the increasing tax demands in the last declining days of the Empire crippled and eventually destroyed the peasant class by reducing tenant-farmers to serfs . It was evident that usury meant exploitation of the poor. Cicero , in the second book of his treatise De Officiis , relates the following conversation between an unnamed questioner and Cato : ...of whom, when inquiry
1856-540: A security threat to the Kingdom of Portugal, because Sephardic Jews had an established reputation in Iberia for joining forces with Moors to overthrow Christian rulers. The Goan Inquisition commenced in 1560 and ended in 1812. It targeted crypto-Jews, crypto-Muslims , and crypto-Hindus . Of the 1,582 persons convicted between 1560 and 1623, 45.2% were convicted for offenses related to Judaism and Islam. A compilation of
1972-682: A well-populated colony with nascent Spanish culture. Some migrants believed that this region would be more tolerant since the lands were overwhelmingly populated by non-Christian indigenous peoples and it was far removed from the metropole. Colonial officials believed that many crypto-Jews were going to Mexico during the 16th century and complained in written documents to Spain that Spanish society in Mexico would become significantly Jewish. Officials found and condemned clandestine synagogues in Mexico City. At this point, colonial administrators instituted
2088-429: Is where Assuming perfect information, p e is the same for all participants in the market, and the interest rate model simplifies to The spread of interest rates is the lending rate minus the deposit rate. This spread covers operating costs for banks providing loans and deposits. A negative spread is where a deposit rate is higher than the lending rate. Interest rates affect economic activity broadly, which
2204-411: Is 10% per annum (before tax). The real interest rate measures the growth in real value of the loan plus interest, taking inflation into account. The repayment of principal plus interest is measured in real terms compared against the buying power of the amount at the time it was borrowed, lent, deposited or invested. If inflation is 10%, then the $ 110 in the account at the end of the year has
2320-629: Is especially applied historically to Spanish and Portuguese Jews who outwardly professed Catholicism , also known as Conversos , Marranos , or the Anusim . The phenomenon is especially associated with medieval Spain, following the Massacre of 1391 and the expulsion of the Jews in 1492 . After 1492 in Spain and 1497 in Portugal, officially they no longer existed. The Spanish Inquisition and
2436-460: Is expected from a risky investment is the risk premium . The risk premium an investor requires on an investment depends on the risk preferences of the investor. Evidence suggests that most lenders are risk-averse. A maturity risk premium applied to a longer-term investment reflects a higher perceived risk of default. There are four kinds of risk: Most investors prefer their money to be in cash rather than in less fungible investments. Cash
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#17327721823922552-462: Is forbidden in both the Old and New Testament. We therefore declare that notorious usurers should not be admitted to communion of the altar or receive christian burial if they die in this sin. Whoever receives them or gives them christian burial should be compelled to give back what he has received, and let him remain suspended from the performance of his office until he has made satisfaction according to
2668-463: Is inherently unjust and one who charges interest sins." Outlawing usury did not prevent investment, but stipulated that in order for the investor to share in the profit he must share the risk. In short he must be a joint-venturer. Simply to invest the money and expect it to be returned regardless of the success of the venture was to make money simply by having money and not by taking any risk or by doing any work or by any effort or sacrifice at all, which
2784-474: Is lent upon interest. Unto a foreigner thou mayest lend upon interest; but unto thy brother thou shalt not lend upon interest; that the L ORD thy God may bless thee in all that thou puttest thy hand unto, in the land whither thou goest in to possess it. that hath withdrawn his hand from the poor, that hath not received interest nor increase, hath executed Mine ordinances, hath walked in My statutes; he shall not die for
2900-425: Is on hand to be spent immediately if the need arises, but some investments require time or effort to transfer into spendable form. The preference for cash is known as liquidity preference . A 1-year loan, for instance, is very liquid compared to a 10-year loan. A 10-year US Treasury bond , however, is still relatively liquid because it can easily be sold on the market. A basic interest rate pricing model for an asset
3016-412: Is question of usury. If indeed someone has fallen into the error of presuming to affirm pertinaciously that the practice of usury is not sinful, we decree that he is to be punished as a heretic; and we strictly enjoin on local ordinaries and inquisitors of heresy to proceed against those they find suspect of such error as they would against those suspected of heresy. (canon 29) Up to the 16th century, usury
3132-427: Is still customary among certain old families to light candles on Friday at sunset and to mourn the deaths of close relatives by sitting on the floor. After almost five centuries, some of the descendants of these families acknowledge having some Jewish ancestry, but practice Catholicism. In addition to these communities, Roman Catholic-professing communities descended from male and female crypto-Jews are said to exist in
3248-456: Is the amount of interest due per period, as a proportion of the amount lent, deposited , or borrowed (called the principal sum ). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, the compounding frequency, and the length of time over which it is lent, deposited, or borrowed. The annual interest rate is the rate over a period of one year. Other interest rates apply over different periods, such as
3364-401: Is the reason why they are normally the main instrument of the monetary policies conducted by central banks . Changes in interest rates will affect firms' investment behaviour, either raising or lowering the opportunity cost of investing. Interest rate changes also affect asset prices like stock prices and house prices , which again influence households' consumption decisions through
3480-550: Is usury. St Thomas quotes Aristotle as saying that "to live by usury is exceedingly unnatural". St Thomas allows, however, charges for actual services provided. Thus a banker or credit-lender could charge for such actual work or effort as he did carry out e.g. any fair administrative charges. The Catholic Church, in a decree of the Fifth Council of the Lateran , expressly allowed such charges in respect of credit-unions run for
3596-467: The Almohads : In his Epistle on Martyrdom, however, Maimonides suggested that the persecuted Jew should publicly adopt Islam while maintaining crypto-Judaism and not seek martyrdom unless forced to transgress Jewish commandments in public. He also excoriated one writer, who advocated martyrdom, for "long-winded foolish babbling and nonsense" and for misleading and hurting the Jews. In a sweeping view of
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3712-592: The Balearic Islands ruled by Spain, publicly professed Roman Catholicism but privately adhered to Judaism, even throughout the Spanish Inquisition . The " Belmonte Jews " of Portugal, dating from the 12th century, maintained strong secret traditions for centuries. A whole community survived in secrecy by maintaining a tradition of endogamous marriage and hiding all external signs of their faith. They and their practices were discovered only in
3828-466: The Catholic Church , argued charging of interest is wrong because it amounts to "double charging", charging for both the thing and the use of the thing. Aquinas said this would be morally wrong in the same way as if one sold a bottle of wine, charged for the bottle of wine, and then charged for the person using the wine to actually drink it. Similarly, one cannot charge for a piece of cake and for
3944-713: The Daggatuns in Morocco are thought to have kept up their Jewish practices a long time after their nominal adoption of Islam. In Iran, a large community of crypto-Jews lived in Mashhad , near Khorassan , where they were known as "Jedid al-Islam" ; they were mass-converted to Islam around 1839 after the Allahdad events. Most of this community left for Israel in 1946. Some converted to Islam and remained in Iran. In 1494, after
4060-532: The Lombard bankers and pawnbrokers , who moved from city to city, was along the pilgrim routes. In the 16th century, short-term interest rates dropped dramatically (from around 20–30% p.a. to around 9–10% p.a.). This was caused by refined commercial techniques, increased capital availability, the Reformation , and other reasons. The lower rates weakened religious scruples about lending at interest, although
4176-555: The Mesopotamians , Hittites , Phoenicians and Egyptians , interest was legal and often fixed by the state. But the Hebrew took a different view of the matter. Theological historian John Noonan argues that "the doctrine [of usury] was enunciated by popes, expressed by three ecumenical councils, proclaimed by bishops, and taught unanimously by theologians." In England, the departing Crusaders were joined by crowds of debtors in
4292-733: The Portuguese Empire with the full freedom of Catholic subjects but away from the Inquisition while collaborating with existing Jewish communities to hide their true beliefs. The presence of crypto-Jews in Goa angered the Archbishop of Goa, Dom Gaspar Jorge de Leão Pereira , and other Europeans like Francis Xavier who wrote polemics and letters to Lisbon urging that the Inquisition be brought to Goa. Crypto-Jews presented
4408-494: The Portuguese Inquisition were established to monitor converted Jews and Muslims and their descendants for their continued adherence to Christian faith and practice, with severe penalties for those convicted of secretly continuing to practice their original beliefs. Information about secretly observant Jews largely survives in Inquisition cases against individuals. Officially, Jews who converted in Spain during
4524-491: The Principate period, most banking activities were conducted by private individuals who operated as large banking firms do today. Anybody that had any available liquid assets and wished to lend it out could easily do so. The annual rates of interest on loans varied in the range of 4–12 percent, but when the interest rate was higher, it typically was not 15–16 percent but either 24 percent or 48 percent. They quoted them on
4640-513: The federal funds rate (FFR). This is the rate that banks charge each other for overnight loans of federal funds , which are the reserves held by banks at the Fed. Until the 2007–2008 financial crisis , the Fed relied on open market operations , i.e. selling and buying securities in the open market to adjust the supply of reserve balances so as to keep the FFR close to the Fed's target. However, since 2008
4756-505: The funding positions of pension funds as "without returns that outstrip inflation, pension investors face the real value of their savings declining rather than ratcheting up over the next few years". Current interest rates in savings accounts often fail to keep up with the pace of inflation. From 1982 until 2012, most Western economies experienced a period of low inflation combined with relatively high returns on investments across all asset classes including government bonds. This brought
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4872-571: The massacres of Jews at London and York in 1189–1190 . In 1275, Edward I of England passed the Statute of the Jewry which made usury illegal and linked it to blasphemy , in order to seize the assets of the violators. Scores of English Jews were arrested, 300 were hanged and their property went to the Crown . In 1290, all Jews were to be expelled from England, allowed to take only what they could carry;
4988-406: The real interest rate they require to receive, or are willing and able to pay, plus the rate of inflation they expect. The level of risk in investments is taken into consideration. Riskier investments such as shares and junk bonds are normally expected to deliver higher returns than safer ones like government bonds . The additional return above the risk-free nominal interest rate which
5104-638: The 13th to the 16th centuries. The ancestral line Sus , Süßkind and Lindauer was a crypto-Jewish susitic ancestral line that settled in the Holy Roman Empire and lived as Catholic or Protestant crypto-Jews. Secondary lineages of the Lindauer are: Lindauere, Lindouer, Lindaer, Linduaer, Lindeaur, Lindeauer, Lindhauer, Linndauer, Lindayer as well as Lindaurr. There have been several communities of crypto-Jews in Muslim lands. The ancestors of
5220-670: The 14th and 15th centuries were known as Cristianos Nuevos (New Christians) but were commonly called conversos (converts to Christianity). Spain and Portugal issued edicts restricting their rights in the mother countries of Spain and Portugal and Spanish and Portuguese overseas territories in the Americas. Although only Cristianos Viejos (Old Christians) who could prove limpieza de sangre ("cleanliness or purity of blood") descended from Christian Iberian European ancestry only, without "tainting" of any Jewish ancestry or Muslim Berber/Arab ancestry, were allowed to officially migrate to
5336-770: The 2000s. During an attempt to tackle spiraling hyperinflation in 2007, the Central Bank of Zimbabwe increased interest rates for borrowing to 800%. The interest rates on prime credits in the late 1970s and early 1980s were far higher than had been recorded – higher than previous US peaks since 1800, than British peaks since 1700, or than Dutch peaks since 1600; "since modern capital markets came into existence, there have never been such high long-term rates" as in this period. Possibly before modern capital markets, there have been some accounts that savings deposits could achieve an annual return of at least 25% and up to as high as 50%. (William Ellis and Richard Dawes, "Lessons on
5452-623: The 20th century. Their rich Sephardic tradition of crypto-Judaism is unique. Some now profess Orthodox Judaism, although many still retain their centuries-old traditions. As one of the towering figures in Judaism and the author of the Mishneh Torah commentary on the Talmud , Maimonides also issued a landmark doctrinal response to the forced conversions of Jews in the Iberian peninsula by
5568-591: The Crypto-Jews , in the response Kunin iterated that these scholars were misunderstanding New Mexican identity which, while authentically tied to Christian and Pueblo historicity, is in line with other Spanish converso histories. In the department of Antioquia , Colombia , as well as in the greater Paisa region , some families also hold traditions and oral accounts of Jewish descent. In this population, Y-DNA genetic analysis has shown an origin of male founders predominantly from "southern Spain but also suggest that
5684-448: The Inquisition in Mexico City. They were arrested and jailed. The governor subsequently died in jail, prior to a sentence of exile. His niece Isabel Carvajal had been tortured and implicated all the family in so-called charges. They were all executed by burning at the stake for relapsing into Judaism, except for one nephew who escaped arrest by fleeing to Italy, and one nephew who was a Dominican friar. His nephew, also named Luis , wrote
5800-595: The Jewish past, Maimonides marshals examples of heretics and sinners from the Bible to show that even oppressors of Israel were rewarded by God for a single act of piety or respect. How much greater then, he argues, will be the reward of the Jews "who despite the exigencies of forced conversion perform commandments secretly." Maimonides championed rationalism over the then-accepted practice of martyrdom when facing religious adversity. This consequently legitimized crypto-Judaism by
5916-735: The Law of the Pure Blood , which prohibited migration to Mexico for New Christians (Cristiano Nuevo), i.e. anyone who could not prove to be Old Christians for at least the last three generations. In addition, the administration initiated the Mexican Inquisition to ensure the Catholic orthodoxy of all migrants to Mexico. The Mexico Inquisition was also deployed in the traditional manner to ensure orthodoxy of converted indigenous peoples. The first victims of burnings (or autos de fé ) of
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#17327721823926032-605: The Mexican Inquisition were indigenous converts convicted of heresy or crypto-Jews convicted of relapsing into their ancestral faith. Except for those allowed to settle the province of Nuevo Leon under an exemption from the Blood Purity Laws, the number of conversos migrating to the New World was reduced. The colonization of New Spain took place as a northward expansion over increasingly harsh geography, in regions that were occupied by tribes angered at
6148-566: The Middle Ages, the Western churches and the guilds , they were pushed into marginal occupations considered socially inferior, such as tax and rent collecting and moneylending. Natural tensions between creditors and debtors were added to social, political, religious, and economic strains. ...financial oppression of Jews tended to occur in areas where they were most disliked, and if Jews reacted by concentrating on moneylending to non-Jews,
6264-537: The Most High; for He is kind to the ungrateful and wicked. Be merciful, just as your Father is merciful. - Luke 6:34-36 NIV The First Council of Nicaea , in 325, forbade clergy from engaging in usury Forasmuch as many enrolled among the Clergy, following covetousness and lust of gain, have forgotten the divine Scripture, which says, " He has not given his money upon usury " [Ezek. xviii, 8], and in lending money ask
6380-549: The New World Spanish possessions, many Christian conversos with Jewish antecedents went to the Spanish possessions, using forged limpieza de sangre documents, or they entered the Spanish possessions via Portuguese Brazil, particularly 1580-1640 when Spain and Portugal were ruled by the same monarch. The entry requirements to the Portuguese colony of Brazil were more lax and also less rigorously enforced. Despite
6496-463: The Phenomenon of Industrial Life... ", 1857, p III–IV) The nominal interest rate is the rate of interest with no adjustment for inflation . For example, suppose someone deposits $ 100 with a bank for one year, and they receive interest of $ 10 (before tax), so at the end of the year, their balance is $ 110 (before tax). In this case, regardless of the rate of inflation, the nominal interest rate
6612-802: The Reformed Churches, regarded the charging of interest at any rate as sinful (as well as charging a fee for the use of money, such as at a bureau de change ). Christian religious prohibitions on usury are predicated upon the belief that charging interest on a loan is a sin. Usury (in the original sense of any interest) was denounced by religious leaders and philosophers in the ancient world, including Moses , Plato , Aristotle , Cato , Cicero , Seneca , Aquinas , Gautama Buddha and Muhammad . Certain negative historical renditions of usury carry with them social connotations of perceived "unjust" or "discriminatory" lending practices. The historian Paul Johnson comments: Most early religious systems in
6728-621: The Sabbath, as well as Sunday" (ibid., 6:17). The Clermont-Ferrand conversions preceded the first forced conversions in Iberia by 40 years. Forced baptisms of Jews took place in Iberia in 616 at the insistence of Visigoth monarch Sisibut : Persistent attempts to enforce conversion were made in the seventh century by the Visigoths in Spain after they had adopted the Roman Catholic faith. Comparatively mild legal measures were followed by
6844-534: The actual conduct of monetary policy implementation has changed considerably, the Fed using instead various administered interest rates (i.e., interest rates that are set directly by the Fed rather than being determined by the market forces of supply and demand) as the primary tools to steer short-term market interest rates towards the Fed's policy target. Financial economists such as World Pensions Council (WPC) researchers have argued that durably low interest rates in most G20 countries will have an adverse impact on
6960-507: The amount of capital they deposited. Base rate usually refers to the annualized effective interest rate offered on overnight deposits by the central bank or other monetary authority. The annual percentage rate (APR) may refer either to a nominal APR or an effective APR (EAPR). The difference between the two is that the EAPR accounts for fees and compounding, while the nominal APR does not. The annual equivalent rate (AER), also called
7076-430: The ancient Near East , and the secular codes arising from them, did not forbid usury. These societies regarded inanimate matter as alive, like plants, animals and people, and capable of reproducing itself. Hence if you lent 'food money', or monetary tokens of any kind, it was legitimate to charge interest. Food money in the shape of olives, dates, seeds or animals was lent out as early as c. 5000 BC, if not earlier. ...Among
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#17327721823927192-442: The annual coupon divided by its current market price. Yield to maturity is a bond's expected internal rate of return , assuming it will be held to maturity, that is, the discount rate which equates all remaining cash flows to the investor (all remaining coupons and repayment of the par value at maturity) with the current market price. Based on the banking business, there are deposit interest rate and loan interest rate. Based on
7308-532: The auto-da-fé statistics of the Goa Inquisition reveal that a total of 57 persons were burnt in the flesh and 64 in effigy (i.e. a statue resembling the person). All the burnt were convicted as relapsed heretics or for sodomy. Crypto-Judaism was documented chiefly in Spanish-held colonial territories in northern Mexico . Numerous conversos joined Spanish and Portuguese expeditions, believing there
7424-447: The benefit of the poor known as " montes pietatis ". In the 13th century Cardinal Hostiensis enumerated thirteen situations in which charging interest was not immoral. The most important of these was lucrum cessans (profits given up) which allowed for the lender to charge interest "to compensate him for profit foregone in investing the money himself." This idea is very similar to opportunity cost. Many scholastic thinkers who argued for
7540-498: The capital, a moderate sum for their expenses and by way of compensation, provided it is intended exclusively to defray the expenses of those employed and of other things pertaining (as mentioned) to the upkeep of the organizations, and provided that no profit is made therefrom. They ought not, indeed, to be condemned in any way. Rather, such a type of lending is meritorious and should be praised and approved. It certainly should not be considered as usurious; (...) Pope Sixtus V condemned
7656-590: The central bank faces difficulties with conventional monetary policy, because it is generally believed that market interest rates cannot realistically be pushed down into negative territory. After the crisis of 2008, the Federal Reserve kept interest rates at zero for 12 years. Crypto-Judaism Crypto-Judaism is the secret adherence to Judaism while publicly professing to be of another faith; practitioners are referred to as "crypto-Jews" (origin from Greek kryptos – κρυπτός , 'hidden'). The term
7772-476: The children of converts had a Christian religious education as well as to prevent the older generation from continuing to observe the Jewish rites or from failing to observe the Catholic ones. A system of strict supervision by the clergy over the way of life and movements of the anusim was imposed... The Neofiti were a group of crypto-Jews living in the Kingdom of Sicily , which included all of Southern Italy from
7888-470: The city of Santa Cruz and its adjacent towns, including Vallegrande , Postrervalle, Portachuelo , Terevinto, Pucará , and Cotoca . Several of the oldest Catholic families in Santa Cruz are of Jewish ancestry; some families still practice certain traditions of Judaism. As recently as the 1920s, several families preserved seven-branched candlesticks and served dishes cooked with kosher practices. It
8004-567: The colonial period. While most maintain their Roman Catholic and Christian faiths, they often cite as evidence memories of older relatives practicing Jewish traditions. Since the 1990s, the crypto-Jews of New Mexico have been extensively studied and documented by several research scholars, including Stanley M. Hordes, Janet Liebman Jacobs, Schulamith Halevy , and Seth D. Kunin, who calls them Hispanos . Kunin noted that most of this group in New Mexico has not formally embraced Judaism nor joined
8120-495: The country's economy . However, a low interest rate as a macro-economic policy can be risky and may lead to the creation of an economic bubble , in which large amounts of investments are poured into the real-estate market and stock market. In developed economies , interest-rate adjustments are thus made to keep inflation within a target range for the health of economic activities or cap the interest rate concurrently with economic growth to safeguard economic momentum . In
8236-535: The dangers of the Spanish Inquisition in Iberia and the Inquisitions established in Mexico City; Lima, Peru; and Cartagena de Indias in what is now Colombia, many conversos continued to secretly and discreetly practice Jewish rituals in the home. After the Alhambra decree of March 1492, which mandated conversion to Christianity or exile for Jews, numerous conversos , also called Xueta (or Chueta) in
8352-460: The debate did not cease altogether. The 18th century papal prohibition on usury meant that it was a sin to charge interest on a money loan. As set forth by Thomas Aquinas in the 13th century, because money was invented to be an intermediary in exchange for goods, it is unjust to charge a fee to someone after giving them money. This is because transferring ownership of property implies the right to use that property for its purpose: "Accordingly if
8468-541: The earliest-known writings by a Jew in the Americas. When Carvajal was in office, the city of Monterrey became a destination for other crypto-Jews who wanted to escape the Mexican Inquisition in the south of the territory. Thus, Nuevo León and the founding of Monterrey are significant as they attracted crypto-Jewish migrants from all parts of New Spain . They created one of the earliest Jewish-related communities in Mexico. (The Jewish communities in modern Mexico, which practice their Judaism openly, were not established until
8584-451: The eating of the piece of cake. Yet this, said Aquinas, is what usury does. Money is a medium of exchange, and is used up when it is spent. To charge for the money and for its use (by spending) is therefore to charge for the money twice. It is also to sell time since the usurer charges, in effect, for the time that the money is in the hands of the borrower. Time, however, is not a commodity for which anyone can charge. In condemning usury Aquinas
8700-685: The economy and hence output and employment . Changes in employment will over time affect wage setting, which again affects pricing and consequently ultimately inflation. The relation between employment (or unemployment) and inflation is known as the Phillips curve . For economies maintaining a fixed exchange rate system , determining the interest rate is also an important instrument of monetary policy as international capital flows are in part determined by interest rate differentials between countries. The Federal Reserve (often referred to as 'the Fed') implements monetary policy largely by targeting
8816-405: The effective annual rate, is used to help consumers compare products with different compounding frequencies on a common basis, but does not account for fees. A discount rate is applied to calculate present value . For an interest-bearing security, coupon rate is the ratio of the annual coupon amount (the coupon paid per year) per unit of par value, whereas current yield is the ratio of
8932-705: The encroachment; they formed loose confederations of indigenous peoples to resist the settlers. Spain financed the expansion by exploiting mineral wealth, enslaving, or forcing indigenous peoples to labor in mines. It established encomiendas for raising livestock, thereby displacing the local people. The indigenous peoples of the North-Eastern quadrant of New Spain (Nueva España) proved particularly resistant to colonial pressures. The Chichimec , Apache , and other tribes resisted conversion to Christianity and avoided being impressed as laborers or slaves on Spanish ranches and in mines. The Spanish believed such peoples made
9048-470: The end of the missive: "Therefore if ye be ready to believe as I do, be one flock with us, and I shall be your pastor; but if ye be not ready, depart from this place." The community hesitated for three days before making a decision. Finally the majority, some 500, accepted Christianity. The Christians in Clermont greeted the event with rejoicing: "Candles were lit, the lamps shone, the whole city radiated with
9164-722: The frontier ( frontera ) a lawless region. Luis Carvajal y de la Cueva , a royal accountant, was a Portuguese New Christian . He received a royal charter from the Spanish Crown to settle Nuevo León , a large expanse of land in the hostile frontier. Because of the dangers and difficulties of this region, Carvajal y de la Cueva received an exemption in his charter from the usual requirement that he prove that all new settlers were "Old Christians" ( of at least three generations ) rather than recently converted Jews or Muslims. This exemption allowed people to go to Nuevo León who were legally barred from entering New Spain elsewhere. Carvajal
9280-406: The harsh edict issued by King Sisibut in 616, ordering the compulsory baptism of all Jews. After conversion, however, the anusim evidently maintained their Jewish cohesion and religious life. It was undoubtedly this problem that continued to occupy Spanish sovereigns at the successive Councils of Toledo representing both the ecclesiastical and secular authorities...Thus, steps were taken to secure that
9396-572: The hated trade of moneylending. Several historical rulings in Jewish law have mitigated the allowances for usury toward non-Jews. For instance, the 15th-century commentator Rabbi Isaac Abarbanel specified that the rubric for allowing interest does not apply to Christians or Muslims, because their faith systems have a common ethical basis originating from Judaism. The medieval commentator Rabbi David Kimhi extended this principle to non-Jews who show consideration for Jews, saying they should be treated with
9512-600: The highest castes from practicing usury. Similar condemnations are found in religious texts from Buddhism, Judaism ( ribbit in Hebrew ), Christianity, and Islam ( riba in Arabic ). At times, many states from ancient Greece to ancient Rome have outlawed loans with any interest. Though the Roman Empire eventually allowed loans with carefully restricted interest rates, the Catholic Church in medieval Europe, as well as
9628-437: The hundredth of the sum [as monthly interest], the holy and great Synod thinks it just that if after this decree any one be found to receive usury, whether he accomplish it by secret transaction or otherwise, as by demanding the whole and one half, or by using any other contrivance whatever for filthy lucre's sake, he shall be deposed from the clergy and his name stricken from the list. (canon 17). [bracketed material in source] At
9744-543: The iniquity of his father, he shall surely live. In thee have they taken gifts to shed blood; thou hast taken interest and increase, and thou hast greedily gained of thy neighbours by oppression, and hast forgotten Me, saith the Lord GOD. Then I consulted with myself, and contended with the nobles and the rulers, and said unto them: 'Ye lend upon pledge, every one to his brother.' And I held a great assembly against them. He that putteth not out his money on interest, nor taketh
9860-606: The judgment of his own bishop. (canon 25) [emphasis in source] The Council of Vienne made the belief in the right to usury a heresy in 1311, and condemned all secular legislation that allowed it. Serious suggestions have been made to us that communities in certain places, to the divine displeasure and injury of the neighbour, in violation of both divine and human law, approve of usury. By their statutes, sometimes confirmed by oath, they not only grant that usury may be demanded and paid, but deliberately compel debtors to pay it. By these statutes they impose heavy burdens on those claiming
9976-539: The late 19th and early 20th centuries, after considerable immigration of Ashkenazi Jews from eastern Europe, and Mizrahi Jews from Turkey and Syria.) Due to the Inquisition activities in Nuevo León, many crypto-Jewish descendants migrated to frontier colonies further west, using the trade routes passing through the towns of the Sierra Madre Occidental and Chihuahua, Hermosillo and Cananea, and to
10092-521: The laws of a state. Someone who practices usury can be called a usurer , but in modern colloquial English may be called a loan shark . In many historical societies including ancient Christian, Jewish, and Islamic societies, usury meant the charging of interest of any kind, and was considered wrong, or was made illegal. During the Sutra period in India (7th to 2nd centuries BC) there were laws prohibiting
10208-559: The light of the snow-white flock" (i.e., the forced converts). The Jews who preferred exile left for *Marseilles (Gregory of Tours, Histories, 5:11). The poet Venantius Fortunatus composed a poem to commemorate the occasion. In 582 the Frankish king Chilperic compelled numerous Jews to adopt Christianity. Again the anusim were not wholehearted in their conversion, for "some of them, cleansed in body but not in heart, denied God, and returned to their ancient perfidy, so that they were seen keeping
10324-485: The north on the trade route to Paso del Norte and Santa Fe (both cities in the colonial Santa Fe de Nuevo Mexico ). Some even traveled to Alta California on the Pacific Coast. In the late 20th century, in modern-day Southwestern United States specifically New Mexico , which was a former territory of New Spain, several Hispanos of New Mexico have stated a belief that they are descended from crypto-Jews of
10440-925: The organized Jewish community. Though some have been sceptical, such as Folklorist Judith Neulander arguing that people could be referring to traditions of modern Ashkenazi Jews migrants and Evangelical Protestant Christians who purposely acquired and employed Jewish traditions. More recently, Evangelical Protestant Christians have opened missionary groups aimed at cultivating evangelical doctrine in Southwestern American communities where crypto-Judaism had survived. The highly influential Hordes has been charged with "single-minded speculation based on largely ephemeral or highly ambiguous evidence" for his conclusion that modern-day Hispanos who claim crypto-Jewish roots are heirs to an unbroken chain of transmission. Kunin responded to some of this criticism in his book Juggling Identities: Identity and Authenticity Among
10556-520: The past two centuries, interest rates have been variously set either by national governments or central banks. For example, the Federal Reserve federal funds rate in the United States has varied between about 0.25% and 19% from 1954 to 2008, while the Bank of England base rate varied between 0.5% and 15% from 1989 to 2009, and Germany experienced rates close to 90% in the 1920s down to about 2% in
10672-422: The potential profit seemed promising. Interest rates were set privately and were largely unrestricted by law. Investment was always regarded as a matter of seeking personal profit, often on a large scale. Banking was of the small, back-street variety, run by the urban lower-middle class of petty shopkeepers. By the 3rd century, acute currency problems in the Empire drove such banking into decline. The rich who were in
10788-406: The practice of charging interest as "detestable to God and man, damned by the sacred canons, and contrary to Christian charity. The first of the scholastic Christian theologians, Saint Anselm of Canterbury , led the shift in thought that labelled charging interest the same as theft. Previously usury had been seen as a lack of charity . St. Thomas Aquinas , the leading scholastic theologian of
10904-485: The practice of charging interest to non-Jews has been restricted to cases when there is no other means of subsistence. "If we nowadays allow interest to be taken from non-Jews, it is because there is no end to the yoke and the burden king and ministers impose on us, and everything we take is the minimum for our subsistence, and anyhow we are condemned to live in the midst of the nations and cannot earn our living in any other manner except by money dealings with them; therefore
11020-427: The rates are historical. There is a market for investments, including the money market , bond market , stock market , and currency market as well as retail banking . Interest rates reflect: According to the theory of rational expectations , borrowers and lenders form an expectation of inflation in the future. The acceptable nominal interest rate at which they are willing and able to borrow or lend includes
11136-426: The relationship between supply and demand of market interest rate, there are fixed interest rate and floating interest rate. Interest rate targets are a vital tool of monetary policy and are taken into account when dealing with variables like investment , inflation , and unemployment . The central banks of countries generally tend to reduce interest rates when they wish to increase investment and consumption in
11252-433: The relationship is so The two approximations, eliminating higher order terms , are: The formulae in this article are exact if logarithmic units are used for relative changes, or equivalently if logarithms of indices are used in place of rates, and hold even for large relative changes. A so-called "zero interest-rate policy" (ZIRP) is a very low—near-zero—central bank target interest rate. At this zero lower bound
11368-757: The religion's standards and provided doctrinal backing for Jews during the centuries of the Spanish Inquisition (1478–1834). According to the Encyclopaedia Judaica , several incidents of forced conversions happened prior to 1492 and outside of Iberia. One of the earliest conversions happened a century after the Fall of Rome and was in Clermont-Ferrand . After a member of the Jewish community in Clermont-Ferrand became
11484-486: The rest of their property became the Crown's. Usury was cited as the official reason for the Edict of Expulsion ; however, not all Jews were expelled: it was easy to avoid expulsion by converting to Christianity. Many other crowned heads of Europe expelled Jewish people, although again converts to Christianity were no longer considered Jewish. Many of these forced converts still secretly practiced their faith. The growth of
11600-516: The return of usurious payments, employing also various pretexts and ingenious frauds to hinder the return. We, therefore, wishing to get rid of these pernicious practices, decree with the approval of the sacred council that all the magistrates, captains, rulers, consuls, judges, counsellors or any other officials of these communities who presume in the future to make, write or dictate such statutes, or knowingly decide that usury be paid or, if paid, that it be not fully and freely restored when claimed, incur
11716-406: The same consideration when they borrow. The Old Testament "condemns the practice of charging interest on a poor person because a loan should be an act of compassion and taking care of one’s neighbor"; it teaches that "making a profit off a loan from a poor person is exploiting that person (Exodus 22:25–27)." Similarly, charging of interest ( Hebrew : נֶֽשֶׁךְ , romanized : nešeḵ ) or
11832-582: The same declaration, gave explicit approval of charging a fee for services so long as no profit was made in the case of Mounts of Piety : (...) We declare and define, with the approval of the Sacred Council, that the above-mentioned credit organisations, established by states and hitherto approved and confirmed by the authority of the Apostolic See, do not introduce any kind of evil or provide any incentive to sin if they receive, in addition to
11948-473: The same purchasing power (that is, buys the same amount) as the $ 100 had a year ago. The real interest rate is zero in this case. The real interest rate is given by the Fisher equation : where p is the inflation rate. For low rates and short periods, the linear approximation applies: The Fisher equation applies both ex ante and ex post . Ex ante , the rates are projected rates, whereas ex post ,
12064-548: The sentence of excommunication. They shall also incur the same sentence unless within three months they delete from the books of their communities, if they have the power, statutes of this kind hitherto published, or if they presume to observe in any way these statutes or customs. Furthermore, since money-lenders for the most part enter into usurious contracts so frequently with secrecy and guile that they can be convicted only with difficulty, we decree that they be compelled by ecclesiastical censure to open their account books, when there
12180-941: The signing of the Treaty of Tordesillas , authorized by Pope Alexander VI , Portugal was given the right to found colonies in the Eastern Hemisphere. In his lecture at the Library of Congress , Professor Sanjay Subrahmanyam , Chair in Social Sciences at University of California, Los Angeles , explains that crypto-Jews were especially attracted to India because not only was it a center of trade, but India had established ancient Jewish settlements along its Western coast. The presence of these communities meant that crypto-Jews, who had been forced to accept Catholicism but did not want to emigrate to tolerant countries (e.g. Morocco, Poland, Ottoman Empire, etc.), could operate within
12296-443: The state unless the parents also converted. Therefore, many of the early crypto-Jewish migrants to Mexico in the early colonial days were technically first to second-generation Portuguese with Spanish roots before that. The number of such Portuguese migrants was significant enough that Spanish colonists began to use "Portuguese" as a synonym for "Jewish" for their settlers. Immigration to Mexico offered lucrative trade possibilities in
12412-640: The taking of clothing as pledges is condemned in Ezekiel 18 (early 6th century BC), and Deuteronomy 23:19 prohibits the taking of interest in the form of money or food when lending to a "brother". The New Testament likewise teaches giving rather than loaning money to those who need it: "And if you lend to those from whom you expect repayment, what credit is that to you? Even sinners lend to sinners, expecting to be repaid in full. But love your enemies, do good to them, and lend to them, expecting nothing in return. Then your reward will be great, and you will be sons of
12528-663: The taking of interest is not to be prohibited" (Tos. to BM 70b S.V. tashikh). This is outlined in the Jewish scriptures , specifically in the Torah : If thou lend money to any of My people, even to the poor with thee, thou shalt not be to him as a creditor; neither shall ye lay upon him interest. Take thou no interest of him or increase; but fear thy God; that thy brother may live with thee. Thou shalt not give him thy money upon interest, nor give him thy victuals for increase. Thou shalt not lend upon interest to thy brother: interest of money, interest of victuals, interest of any thing that
12644-513: The time, usury was interest of any kind, and the canon forbade the clergy to lend money at interest rates even as low as 1 percent per year. Later ecumenical councils applied this regulation to the laity . Lateran III decreed that persons who accepted interest on loans could receive neither the sacraments nor Christian burial. Nearly everywhere the crime of usury has become so firmly rooted that many, omitting other business, practise usury as if it were permitted, and in no way observe how it
12760-545: The unpopularity—and so, of course, the pressure—would increase. Thus the Jews became an element in a vicious circle. The Christians, on the basis of the Biblical rulings, condemned interest-taking absolutely, and from 1179 those who practiced it were excommunicated . Catholic autocrats frequently imposed the harshest financial burdens on the Jews. The Jews reacted by engaging in the one business where Christian laws actually discriminated in their favor, and became identified with
12876-488: Was Santa Cruz de la Sierra . In 1557 many crypto-Jews joined Ñuflo de Chávez and were among the pioneers who founded the city. During the 16th century more crypto-Jews that faced persecution from the Inquisition and local authorities in nearby Potosí , La Paz and La Plata moved to Santa Cruz, as it was the most isolated urban settlement and because the Inquisition did not bother the Conversos there; Some settled in
12992-587: Was an economic opportunity in the new lands, and that they would have more freedom at a distance far from Iberia. Different situations developed in the early colonial period of Mexico, the frontier province of Nuevo León , the later northern frontier provinces, and the colonial experience of the Mexican Inquisition . The crypto-Jewish traditions have complex histories and are typically embedded in an amalgam of syncretic Roman Catholic and Judaic traditions. In many ways resurgent Judaic practices mirrored indigenous peoples' maintaining their traditions practiced loosely under
13108-675: Was authorized to bring 100 soldiers and 60 laborers to New Spain; many have been documented as crypto-Jews. With Carvajal as governor, Monterrey was established as the center (now in the state of Nuevo León). Within a few years, some people reported to authorities in Mexico City that Jewish rites were being performed in the Northern Province and efforts to convert heathen indigenous peoples were lax. The principal economic activity of Carvajal and his associates seems to have been capturing Indians and selling them into slavery. Carvajal's Lieutenant Governor, Gaspar Castaño de Sosa , led
13224-537: Was condemned by the Catholic Church, but not really defined. During the Fifth Lateran Council , in the 10th session (in the year 1515), the Council for the first time gave a definition of usury: For, that is the real meaning of usury: when, from its use, a thing which produces nothing is applied to the acquiring of gain and profit without any work, any expense or any risk. The Fifth Lateran Council, in
13340-447: Was made, what was the best policy in the management of one's property, he answered "Good grazing." "What was next?" "Tolerable grazing." "What third?" "Bad grazing." "What fourth?" "Tilling." And when he who had interrogated him inquired, "What do you think of lending at usury?" Then Cato answered, "What do you think of murder?" The book of Deuteronomy prohibits Jews from charging interest except when making loans to foreigners. Typically,
13456-598: Was much influenced by the recently rediscovered philosophical writings of Aristotle and his desire to assimilate Greek philosophy with Christian theology . Aquinas argued that in the case of usury, as in other aspects of Christian revelation, Christian doctrine is reinforced by Aristotelian natural law rationalism. Aristotle's argument is that interest is unnatural, since money, as a sterile element, cannot naturally reproduce itself. Thus, usury conflicts with natural law just as it offends Christian revelation: see Thought of Thomas Aquinas . As such, Aquinas taught "that interest
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