Monday, March 2, 2009

The problem with the "bailout" of banks

Bailing out banks because they suffered "losses", Or did they? In the United States, as well most of the world, banking systems are privately owned corporations; including the Federal Reserve Bank. It is a class A stock corporation and is no more "federal" than Federal Express or your fast-food chain.

Here is the problem. Banks tend to use "fractional" banking. They will loan out 10 times what they have on deposit. An example: They take in $1 in a savings account, and they will loan that same dollar out TEN TIMES!. Now, we all know it is impossible to loan out a single dollar bill ten times at the same time, so what the banks do is loan out "credit".

For every dollar in actual assets, they will loan out NINE MORE in "credit" in which they make up out of thin air, just a journal entry. When someone buys a car or a home, and "borrows the money" from a bank, they do not ever actually get "cash", but only a "letter of credit" from the bank telling the car dealer or the mortgage company that "you are good for the loan".

So, how can a bank (any bank in the world who works this way), have "losses" of billions? They CAN'T!

What they "LOST" is the Potential of what they COULD HAVE MADE, if the home buyer did not default.

A guy sued the bank after he was foreclosed on, and his argument was that since the bank GAVE HIM NOTHING but a line of credit, there was NO consideration, and therefore without consideration, there could not have been a lawful contract. HE WON. The bank BORROWED HIM NOTHING!, they only
made an entry in a journal that he owed them x amount of dollars, without actually ever giving him any dollars. Get that? What a scam! I wished some days I would have devised such a diabolical scheme, but I would not have been able to sleep at night.

I don't know about other countries, but here in the United States, we are hit up for 50 billion a year on INTEREST. Interest on what? What is the principal? who knows. It could be as little as a few million dollars. BUT, and here is the kicker! According to the original Federal Reserve banking act, it's my understanding that the principal has to be paid back in "lawful money", which is STILL gold or silver, not that "funny money" that we are forced to use in lieu of REAL money.

This nation has been bankrupt since the 1930's. JFK trying bypassing the interest bearing debt based monitary system via executive order, and we see where it got him. Lincoln did the same. He ordered "greenbacks" printed to finance the invasion of a sovereign nation called "The Confederate States of America". Well the banks couldn't have that! They like to finance BOTH sides of the conflict, so BOTH are indebted to them, and no matter what side wins, they (the money changers) ALWAYS win!

I would not loose a nights sleep if I woke up in the morning to learn of hundreds of bank owners being hung from trees and lamp posts all over the world. They (in my opinion) are worthless parasites and if they were eradicated I would say good riddance!

If a bank wants to borrow me x amount to buy a car, GIVE ME THE FREAKING MONEY! not some journal entry. Bankers: Don't lend more than you actually have! Lest you be a greedy bastard who deserves to be tarred and feathered and ran out of town! (Trust me, I am being VERY polite!)