AIM Framework glossary
Interest-Only Threshold
Canonical definition
The Interest-Only Threshold is the condition at which servicing the Mimetic Premium on Money alone consumes the whole of a population's generative capacity above subsistence, so that principal is never reduced, the Object borrowed for is never acquired, and every unit of surplus flows to the maintenance of claims rather than to their discharge.
Explanation
A borrower who can pay principal and Interest is slowly buying the thing. A borrower who can pay only the Interest is renting access to their own debt forever: they own nothing at the end of any period, and everything they produce beyond staying alive goes to keeping the claim alive instead. When that becomes the condition of a whole population rather than of one borrower, the threshold has been crossed. It is also what a perfectly calibrated extraction looks like from below — the maximum that can be taken without ending the taking — which is why the threshold and the Parasitic Equilibrium are one locus seen from the two sides of the relation. Formal statement: Appendix 12A, Section 12A.5. Prose derivation: Chapter 12, Section 12.29.1.
Epistemic status
Framework-Specific Named Result.
Derivation
Related terms
- Mimetic Premium (PM)
- Money
- Parasitic Equilibrium
- Boundedness Asymmetry Principle
- Blind Pricing