Big news now, the Banks.
With good reason: they make record profits, they nearly brought the world to a stop with their practices, they’ve been shown to have no more business acumen (with respect to stock/share/derivative trading) than a brick wall yet they still pay stupendous salaries and impose stupendous charges – at a whim! backed by spurious or downright untrue justifications.
Who says this? An idiot like me without any special knowledge?
No. Many specialists in the subject, up to and including our own Treasurer, Wayne Swan.
Wayne Swan is obviously going head to head with the banks.
On the grounds of what is financial responsibility and good banking practice.
Not on a matter of taste or aesthetics, but on a matter of principle, of logic, of law.
They obviously aren’t both right.
And if the banks are wrong they should be put in prison for massive fraud.
If the Treasurer is wrong he should be sacked and thrown out of politics for virtually the same reason.
It seems pretty obvious to me that the banks are wrong.
But it is also pretty obvious the whole banking system is wrong.
The whole world agreed about that at the time of the ‘financial meltdown’ – but I believe that nothing has been done to change it.
The fundamental flaws are two, the way I see it:
1. The banking system provides the capital for driving the capitalist system by drawing on our funds – us, the people, in fact ‘non-capitalist’ capitalists because we effectively have no capital.
2. The capital supplied to the ‘capitalists’ within our system – the developers, the project devisers and implementers, the ‘major players’, the big corporations and such – is a many times multiple of the real funds available.
So: using our money for ‘seed’ they lend out multiples of that amount… they create money. Read Wikipedia about it HERE
Typically deposits of $100 can create $400 of ‘money’ in circulation, causing things to happen.
$400 worth of building going on (or $400 million) because you and I deposited $100 ( or $100 million ) of cash.
This is the capitalist system. This is how it all works.
Fine while it works.
But if it ever starts going backwards and ‘unwinding’ it can lead to ‘rolling’ disasters, failures, crashes and that’s what’s happened more than once.
Before you get too fancy you can see right there at the beginning that uncertainly and danger are built in from the start when banks are allowed to lend out $80 of $100 deposited.
This means from the very beginning that if we ever turned around and all asked for our money back it wouldn’t be there.
That’s a ‘run on the bank’ and it is always, in every case, theoretically the end because the money’s never there.
Now the point is the capitalist world needs this shonky mechanism to ‘capitalise’ or fund ventures. The capitalist world requires large sums of capital to do anything.
Simple highway road building costs $1 million a kilometre or somesuch I’ve heard.
Olympic games cost billions. Building shipyards, building new mines… whatever.
The world needs this mechanism.
So the world should have it, I guess.
But WE don’t need it.
WE need somewhere to put our money that is safe from bank failure.
This was recognised in the recent crisis when banks were guaranteed all over the world by governments, to stop a ‘run on the bank’.
We need that protection.
We also need protection against shark-like bank practices that are nothing to do with this underlying mechanism of financing the growth and maintenance of our capitalist world but are simply greedy attempts to steal our money.
Fees and charges. Interest on deposits that we don’t get. Bank expenditures that should not be allowed – gratuitous wastes of funds from marble halls to CEO salaries and handouts.
All of this stuff is wrong, wrong, wrong.
The exorbitant ‘marble halls’ are truly temples to Mammon and within that temple to Mammon you are made to pay tribute, you get robbed.
Lucky today to have your money in a bank and have it grow at all. But if it does grow it will not grow as it should have. You will not get your fair share of the profits made by the bank.
And you will always be waiting there to lose everything if the overlying system collapses.
No. We need none of that.
And surely the truth will out, in this day of the internet and internet banking and millions of good ordinary (meaning not exceptionally avaricious, thieving, lying, conniving…) people devising every new things, software, methods, connections, abilities.
We need somewhere to put our money where it is safe and where when it is used in a profitable investment the returns are returned to US.
We need plain and simple banks. Like tin boxes under the bed.
Let our banks be safe and simple and let the avarice and conniving and treachery and trickery of the big banks and the wheeler-dealers of the world be somewhere else.
Perhaps there’s something like that around right now.
I don’t know. I haven’t looked into it – perhaps I should be ashamed to say that. But maybe that is what Building Societies are. I must look.
Because it is obvious, written large and repeatedly that banks are not my friends, at all.
p.s.
‘The Week’ 29 Oct 2010 News: (paraphrase) The Big Four banks expected to report a combined cash profit of $21billion in 2010 – a rise of 32% on 2009.
And they scream poor mouth………
It seems obvious to me that what is going on here is plain and simple a tussle between the banks and the government to see who really runs this country – and the banks are winning….