Banksters Paradise

We all know the big banks had a lot to do with the global financial crisis from 2007 - 2008, officially recognized as the worst financial crisis since the Great Depression of the 1930s

_{source: YouTube}

A lot of angry noises have been heard since then; the term "banksters" has become popular again for the first time since the 1930s , in the middle of the Great Depression:

Judge Ferdinand Pecora has been credited with coining the term Bankster. In June 1933, his image appeared on the cover of Time magazine, seated at a US Senate table, a cigar in his mouth. Pecora’s hearings were said to have coined a new phrase, “banksters” for the finance “gangsters.” However, the word, with the same meaning, had appeared in the U.S. press at least a year and a half previous to that.
_{source: Wiktionary}

Since this latest banksters induced crisis, from which we're still suffering, a lot of anger has been rightfully directed at the world's financial sectors, the big bankers in particular. Much of this anger is directed at their practice of "creating money out of thin air", thereby devaluing the national currencies; they "inflate" the money-supply without more goods or services being produced. In many of the angry rants against banks and central banks, including some of my own I must admit, that last part is left out.

It's important to understand though, that any real economy eventually consists of goods and services produced. So it's completely natural and logical to increase the money-supply if and when production increases, or if the population increases; a nations money supply should be a representation of it's real economy. When banks create money, or give out loans for productive reasons (money to invest in viable businesses), there's nothing wrong yet.

It's when banks use their power of money-creation to give out loans with the aim of doing financial transactions, to buy ownership of already existing goods or real-estate, the inflation starts. Central banks say they guard against inflation; the EU's Central Bank aims for a "healthy" inflation of around 2% per year. I hope the above explanation has made it clear that real inflation is always much higher, given the way banks use their exclusive right to create money.

_{The (Secret) City of London, Part 1: History}

But... we've let them get away with this far too long and the world's biggest banks are the world's most powerful institutions. To illustrate I'd like to tell you about Bankster's Paradise, which is actually located in the heart of London and is called the "City of London". It's about one square mile and it has it's own mayor, it's own laws, it's own elections with votes held by the corporations (banks, mostly) and it's own traditions, including some weird ceremony in which the queen of England has to ask permission to visit. The above video downplays all of this and concludes that the City of London is just "a unique place"... I'll let you draw your own conclusions.

Another illustration of how powerful these banks really are is the way in which they lie about what they actually do. You see, banks are still seen by too many people as these intermediary agents who perform the humble and noble task of guarding people's money by letting them deposit money and withdraw when needed, and lending out money to people who temporarily need it.

Truth is that banks perform either of these services. Technically and lawfully you loan your money to the bank when you make a deposit, the bank loans money from the population, and when the bank lends you money and you've signed the contract, you have actually sold them a security, a promissory note or a written promise, that you'll pay the bank that amount of money over time. But where does the bank get that money in the first place? Well, they don't, and you don't get any actual money when you sell your promissory note to them; they'll just transfer a part of their debt (the "deposits") to the public to your account.

So the bank is actually in the business of selling and buying securities, not depositing and lending money. The fact that they for hundreds of years have been able to present a completely different picture to the public than the actual reality of their business model takes a lot of power. I'll let a cooler head explain all this; in this video I found last year professor Werner explains how the banking system really works, and why there's no problem in creating money for productive reasons; it doesn't matter that much what is used as a means of exchange, as long as it remains a representation of the real economy.

_{Prof. Werner brilliantly explains how the banking system and financial sector really work.}

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