Open Letter To The Four Countries Left In The World Without An International Central Bank Crippling Them
Thursday, January 19, 2012 2:28
Belief systems are complicated structures made of manufactured elements with control mechanisms woven into them and elements arising spontaneously from the needs, ingenuity and versatility of the people living them, altogether making up “the way it is”.
Banking is a manufactured element.
“All wealth is created by work” is a fact.
The core – and legitimate – belief underpinning banking systems is that they borrow money from a large number of depositors at a favorable long-term interest to them and lend it out to a small number of investors at higher rates favorable to the general economy – low investor rates mean a short-term return of loan capital which generates real growth and prosperity while high interest slows growth.
Capitalism is a manufacured system based on the historically unequal distribution of wealth.
Today the codified legal mechanisms rewarding inequality are proving untenable.
A kind of shared guilt here may be one reason the west is in denial over the economic collapse now under way from the top down to the ground where the realisation is sinking in that when a bank charges you to lend them your money, something is awry.
So where do you put your money? “Buy gold! Try Forex trading!”.
A bank is sustained because the number of depositors far exceeds the number of investors. But the home mortgage ratio of depositors to borrowers is about even – everyone 'saves' and everyone buys a house - “that's the way it is”.
So where do the banks get the money they lend out to buy homes?
FRACTIONAL RESERVE
A Mortgage is a debt incurred against the collateral of future earnings, so the wealth does not exist until it is created by the borrower over the life of the mortgage. That wealth is then equally divided between the bank and the borrower who 'owns' the home at the 'death' (mort) of the 'contract' (gage) after paying about twice the original price.
The Fractional Reserve system allows a bank to lend out up to eight or more times as much as it has in its reserves from depositors' future mortgage-debt money.
Government (sovereign) money works without cost: 'Real' gold (unwieldy) or paper backed by the nation's assets, usually represented by gold, is paid into the economy with some as low interest, non-profit loans.
This money simply facilitates the movement of goods and services throughout the economy, from manufacturers to consumers, without interest or debt.
No outside entity siphons wealth from this system.
'Fiat' money is used throughout today's banking system, money created out of the thin air of belief in it!
It is printed by international reserve banks, 'lent' to governments in the collusion that this is 'real' money, but is a fictitious currency not backed by work or gold or anything else, hence the term 'thin air'.
Governments then spend this money into their economies to facilitate commerce in the same way as real money, only with interest... the siphon.
So the international central banks are privately-owned profit-driven businesses and their paper is 'expensive' money as it carries interest which governments must pay back with real money created by work and extracted through taxes which is where the system fails: even ever-increasing taxes are never enough to pay for all government services as well as interest on fiat money.
Why? Interest tends to accumulate through further Keynesian borrowing to the point where national debt becomes greater than GDP.
That the current world banking system has left every believer in it bankrupt suggests that it has reached the end of the game – the banks now virtually 'own' every country in the west (except Iceland - and Iran and North Korea, Syria and South Africa) simply by indebting them!
Iran, North Korea, Syria and South Africa still have sovereign banking systems - Iceland has just recreated theirs, and are also still without that crippling debt-to-GDP ratio of more than 100%.
If belief in this system is not suspended while you still have the means then debt will overwhelm you as it has the rest of the world and you will no longer be observing this global 'financial adjustment' from afar.