Here is Banking 101.
As an intro, you might want to read this: Billions for the Bankers; Debts for the people. [amazon_link id=”B0028GAVXA” target=”_blank” ]Billions for the bankers, debts for the people.[/amazon_link]
Read it, and you can spare reading the rest of this post.
First off, I would like to pose a rhetorical question: “What do Banks Produce?”
If your first response is:
1. Money, or
2. Credit
You have no right protesting, and need to do a bit more research.
A simple lesson in economics. Oh, the correct answer to question number one is: income for the bankers.
Let’s start at the beginning.
Basically, according to Maslow; Man needs three things to survive:
1. Food
2. Shelter
3. To reproduce. (some of mankind is better at this than others…[amazon_link id=”3421044309″ target=”_blank” ]Deutschland schafft sich ab[/amazon_link].
Now to get into the history. To misquote George Santayana, “Those who ignore history are doomed to repeat it.”
Of course, for a look at true economics, you should check out Lugwig Van Mises.
Let us look at a very simple economy. The farmer, miller, the baker and the customer. The farmer grows the wheat, the miller grinds the wheat into flour, the baker makes the bread, and the customer buys it.
Customers need more bread. The Baker goes to the miller, and says, “I need more flour.” The miller goes to the farmer, and says, ” I need more wheat.” The farmer says, “I need to clear more land, get a new tractor, and more seed.” Clearing the land he can do under his own effort (an investment of time and energy.) Perhaps he has been able to put aside money from the sale of crops in the past to get the new tractor. If not, than he has to find a source for the funds elsewhere. He can ask the miller for funds. Of course, the miller will not want to give the funds freely, and will ask for a bit more extra grain to compensate for the risk. After all, a wet spring could delay planting, the crops could be damaged by hail, the harvest of grain is not guaranteed.
This is a basic example of investment. Reward balanced against risk. Unfortunately, it is hard to evaluate risk, and the establishment of ‘interest’ to compensate for ‘risk’ has given base to the system we have now…
We have come a long way since the overturning of the tables of the money-changers in the temple…mostly backwards.
-…Still ín progress…more tomorrow…
To come:
The Federal Reserve has very little to do with the Federal Government…only that the taxpayer guarantees the security of the private banks.
China will put the next iron on the fire; who thought that the Communists could have a credit crisis. How about security on loans 50 feet under water? It give a new meaning for ‘underwater loans.’ Good thing they have all that cash from Walmart shoppers…Oh, crap. That would be from the purchase of Federal Reserve Notes. I wonder how this is going to work out?
Ok more later
