In the lead-up to the financial crisis of 2008, the financial industry—the Federal Reserve’s banking cartel—grew at a tremendous rate. Armed with fractional reserve banking, these banks continue to have the singular crony privilege of creating money out of thin air. They can lend out nine times as much money as they actually have on deposit. The interest rates they pay you on your savings are less than 1% (and zero for checking), yet the interest rates they change others for cars loans, etc., are usually several percent higher ( the mortgage market is around 3.5%). Therefore, if a bank makes 7% interest and pays you 1% for your money, they make 600% profit.
The profits they gather from those of us who are still paying interest to banks is made with no risk; no effort, no production of any goods; and only on the creation of counterfeit money.
Our outdated notion of commercial banking is that its primary revenue comes from offering the usual checking and savings accounts, ATMs, debit cards, credit card loans, car loans, and mortgages.
Yet these retail activities account for only 10% of the revenues of US banks. According to John Kay’s book Other People’s Money, the other 90% comes from trading securities with other banks. With their ill-gotten stake, they gamble with each other like thugs in an alley. The spend the excess on tall buildings, ornate offices and of course large salaries and bonuses. Who went to jail after 2008? Oh yeah, no one.
“Muppet” is their term for us “little people” and everyone’s retirement funds.
There are those who clamor for reform, who blame the repeal of Glass-Steagall. Since our nation is not flush with justice at the moment, I suggest that we learn to ignore these banks and how not to use them. Let us just say no to rewarding their behaviors, and to starve them of the money that we. in the past, unknowingly left sitting in their hands Let’s remove their leverage into more debt and failure. And we must. What justice we got post-2008 was the Dodd-Frank bill, that stops government bailouts, but gives them the power to seize any of your accounts to make their Christmas bonuses.
Some things are so bad they cannot be fixed. Far better that they just are forgotten as soon as possible. Learn how to make Privatized Banking work for you. Is the fastest solution to this problem, and will better serve your family’s and business’ needs.