The problem
Since Autumn 2008 things haven’t looked their best. We’ve heard it mentioned so often it’s become entirely boring to hear; something is wrong with our finances. We’ve got an efficient and rabid media chasing down names and pointing at banks but some juicy and infuriating details are glossed over. I thought I’d share some of the more interesting points of the disaster.
110%
Herein lies the problem. It has become quite a common phrase. People no longer settle for giving 100%, they want to give 110%, they want overunity and to create something from nothing. Why settle at 110%? The sky isn’t even the limit under this crooked system, we can go to infinity and beyond, into new dimensions of matter, why not go for 500%? Dare I say it, 1,000,000%!?
Take note on this lesson. You can’t create something that didn’t already exist. If you had 1000 grams of gold, and ONLY 1000 grams of gold, how could you ever create 1100 grams of gold? You can’t, because you’ve only got 100% to give.
This is exactly what bankers have been doing with finance. They’ve been giving 110% for decades and their fantasy of creating something from nothing has leaked into our psyche. When you ask for a mortgage or a loan, you do so under the assumption that the bank has money to lend but the reality is somewhat different. According to the Basel II recommendations a bank only needs to have around 8% capital against the assets they loan out. Let me put that another way, a bank would only need £8 to lend you £100, a loan backed up by barristers, bailiffs and bullies. Give that notion some thought.
Banks loan out money they never had, or more specifically, money that never existed. Money that doesn’t exist is called debt and this is precisely what a bank loan is. Each and every time a bank pays out a mortgage, they create a debt which must be paid, since the money (or wealth) they have loaned out does not yet exist. Mortgage owners have to then go out and create that wealth; we have to cut down trees, mine the ground, drill oil, manufacture cars to pay back the endless debt being drummed up by trigger happy banks.
They even have the audacity to charge you interest on top of the money they never had and we’ve been stupid enough to let them get away with it. Why challenge a system that gives you iPods, cars, houses and jobs? The problem is that while we get iPods, cars, houses and jobs the banks get colossal assets, governments in their pocket and well-paid minions to spread their false gospel. “We need banks.” Did I miss a meeting?
You can’t create wealth from nothing and to do so should be considered fraud. We earn wealth and banks take it from us. The money they lend out only becomes real when we pay it back. We go out into the real world and create wealth by making things, mining things, and selling things. The bankers just take that home each month when we pay our mortgage.
Sustainability is not an option under this system. Every time the bank loans out money we have to rape the planet of resources to pay it back. This is exactly why the economy must keep growing, because the banks keep making debt that needs to be paid off. Nothing will stop them making debt because our free market allows them to make a disgusting amount of money doing it. They’re forcing us to destroy our planet, but it needn’t be this way. If banks weren’t forcing us to create wealth, would we be cutting down rain forests? Would we be drilling for oil? We would have learned to live sustainably. Thanks to the endless resources we now have (thanks to the banks) there must be a way for us to live without taking more from the planet.
People who have taken out loans, bought cars on credit and taken out mortgages on homes they can’t afford have lost; the banks will reclaim anything you bought with their imaginary wealth. The moment you hand over your home (or anything for that matter) the imaginary wealth becomes real, because the bank is now in possession of a physical saleable object. No one paid for it, but they now own it.
Money as debt
Find 47 minutes to watch this presentation by Paul Grignon. Find another 47 minutes to forward it on to friends. It’s a great introduction into the gross injustice of the financial system, so take some time out to watch it.
National Debt
In the United States it now stands at $11,253,255,972,481.28 amounting to $36,760.73 per citizen. Realistically can that ever be paid back? If this were a poker game the US would have left the table years ago. Bankrupt isn’t even the word.
It’s not a problem just in the United States, the UK is in similar shape with national debt sniffing around the £2.2 trillion mark. If everyone in the whole country didn’t spend a dime for an entire year and instead gave every penny generated back to the bankers to whom we owe this money, we’d still be debt by half a trillion pounds and we’d have died of starvation. The scale of the mess can’t be overstated.
Belief
Of course it’s only a mess if you believe in it. Based on the Basel II recommendations, do you think we should even pay up? I hesitate to use the term “pay back” because they never had this cash in the first place.
Should banks be able to “create” wealth at the snap of their fingers and then demand it is paid back in full? The banks stole from us for years, ran the country into the ground and then convinced us to pay for their mess without causing one major riot. It’s an incredible feat and they’re laughing each morning knowing they’re getting away with it.
The UK’s £70 billion bank bailout would have been better spent if it was instead used to pay off our mortgages, it would have ended up in the bankers pockets anyway. The same could be true of any country that considered a bailout. Of course it isn’t in a banks interest to have a world that own their houses outright and owe them nothing, so the idea doesn’t even get discussed.
The system is corrupt from top to bottom, we need to completely forget it ever existed and start afresh. I’ve a blog post coming which I hope will show how we can get the ball rolling.
