Dr Joel Wallenberg, ‘“Stealing money from old people slowly”: natural interest rates and unnatural financial repression’ + Q&A

What do the farmers of ancient Babylonia and AirBnB have in common? This is one of the many questions we will answer in our exploration of the ways interest rates are used and abused. Loans at interest are a tool of financial planning so old that they actually predate money itself. Perhaps equally old is controversy around the moral use of interest rates, including the Catholic Church's multi-century ban on ‘usury’, and controversy over the appropriate level of interest for different situations. Still older is one of the most wonderful adaptations in the evolution of human cognition: the ability to postpone immediate gratification in favour of future rewards. Interest can be seen as an expression of this basic human trait. Human cognition is not without its quirks, however, and while humans are better at waiting for rewards than capuchin monkeys are, they are not perfect in judging the “price of time”, as economic historian Edward Chancellor calls it. In this talk, we will explore the origins of interest in nature, and discuss some of the practical implications of these natural interest rates, including how they can be manipulated for gain. We will then move to how interest rates can be suppressed by force to suit the needs of governments, which curtails economic freedom, subverts business fundamentals, and as the Keeper of the Library of Mistakes, Russell Napier, terms it, “steals money from old people slowly”.

Dr Joel C. Wallenberg received his BA from Stanford University in 2003 and his PhD from the University of Pennsylvania in 2009, where he began his first career in academic quantitative linguistics and cognitive science. He worked at the University of Iceland, Newcastle University, and more recently, as Senior Lecturer at the University of York. In 2021, Joel began to apply his quantitative skills to finance and investing, with a focus on credit and fixed income (bonds), and began to consult as a portfolio manager for a select group of clients. Since 2024, he has been the (only) UK correspondent for a premier financial periodical based in New York, Grant's Interest Rate Observer. He also works some of the time as a credit analyst for a local company, and maintains research contacts in cognitive science at Newcastle University.