Saturday, July 9, 2016

The Banking Racket

It's long been a joke on the comedic circuit that banking is a backward business. If you have money, they give you more money in the form of interest. If you don't have enough, they take money from you in the form of overdraft and "insufficient funds" fees. Basically, money is funneled from the bottom to the top, taken from the poorest people and dumped into the accounts of the richest. It's the cornerstone of modern banking. They pay the rich for the privilege of using their money to gamble on the stock market.

It wasn't always this way, however. In the middle ages, and earlier, it was considered a sin to charge interest on a loan. This isn't just a random bible verse or two either. It is EVERYWHERE in the text, so much so that there can be no doubt that the authors of the book could never be mistaken on this issue.

Leviticus 25:35-37

“If your brother becomes poor and cannot maintain himself with you, you shall support him as though he were a stranger and a sojourner, and he shall live with you. Take no interest from him or profit, but fear your God, that your brother may live beside you. You shall not lend him your money at interest, nor give him your food for profit."

Luke 6:34-35

"And if you lend to those from whom you expect to receive, what credit is that to you? Even sinners lend to sinners, to get back the same amount. But love your enemies, and do good, and lend, expecting nothing in return, and your reward will be great, and you will be sons of the Most High, for he is kind to the ungrateful and the evil."

Deuteronomy 23:19-20

“You shall not charge interest on loans to your brother, interest on money, interest on food, interest on anything that is lent for interest. You may charge a foreigner interest, but you may not charge your brother interest, that the Lord your God may bless you in all that you undertake in the land that you are entering to take possession of it."

Exodus 22:25

“If you lend money to any of my people with you who is poor, you shall not be like a moneylender to him, and you shall not exact interest from him."

If I listed them all, it would be rather exhaustive, so I won't. There are plenty more verses on interest and moneylending that can be found here.

In the middle ages, and arguably the centuries before and after as well, the bible was the highest law in the land. These verses presented a problem for the christian who wanted to make a career out of money manipulation because the practice was outlawed, outright. There was another group, however, that didn't follow these rules or apply them as literally as the catholic church, and they were the Jews of Europe.

Hated, discriminated against, and subjected to countless purges and vicious rumors which continued this cycle of hate and murder, most Jews in Europe couldn't own property, and couldn't be hired as labor by the christian populace. This meant that they couldn't operate a proper business, and couldn't work for someone else's either so they had to find a niche that the predominately christian populace needed filled, and couldn't do themselves. Money-lending fit this bill perfectly. The reason alot of bankers to this day are Jewish is the fault of christian bigotry, rather than an indictment of Jewish culture. Of course the charging of interest was considered obscene, even if it was done by non-christians, and this was used as an excuse for even further purges and mock trials that had many christian debtors testifying against their Jewish lenders as a means of vacating their debt. You can't pay back a pile of ashes in the town square...

Another group, the Knights Templar, attempted to compete with the Jewish moneylenders and found a loophole in the whole business of interest by calling it "rent" instead. They had amassed so much wealth charging christian visitors for protection along the roads to the holy land, and through the spoils of war brought back from multiple crusades that they just couldn't find enough things to do with it. They decided to bankroll the extravagant lifestyles of the European aristocracy, some monarchs becoming so deeply indebted and owing so many favors to the Knights that they could never repay their "rent" on the loans they had taken. Eventually King Philip IV of France decided he was done making payments and convinced the Pope to disband the order which had become so rich and powerful that they threatened to bankrupt and topple entire governments. The Knights were rounded up, vicious rumors and allegations were hurled at them, and they were tortured and burned at the stake. It would seem that money-lending has always been a dangerous occupation.

The bankers in Iceland found this out just recently when, unlike America which bailed their banks out with public money when they spent too much of their own at the Wall Street slot machine, they rounded up the CEOs of all their major banks and arrested them. Most are still in prison to this day, and this so scared the banking establishment in America that there was a virtual media blackout and this event was never covered by our major news outlets, most of whom have their own bank debts and bank sponsors.

The problem is, of course, interest, and it always has been. When you look at what a bank actually does, compared to what it should do, you can see why. Banks should be a place where you can safely store your money. Before the advent of these institutions, if you had an abundance of cash, you either reinvested it in property, or you locked it up in a chest, hid that chest, and hired guards to defend it and hoped those guards didn't pinch any coins for themselves. Holding onto cash was a dangerous proposition and invited treachery.

If banks were run as a true business and weren't allowed to gamble with their clients' money investing in stocks, property of their own, and all manner of other moneymaking schemes they'd have no income and would have to charge for the services they actually provide to their customers... protecting their money. Instead of paying their clients for the privilege of using their money to make more, a fee of $1 for each $100 stored in the bank per month would keep most bankers rich and if the wealthy money-holders didn't want to pay the fees, there's always a mattress they could stuff it into and they could take their chances. Your average American would pay almost nothing for this protection, maybe $5-$10 a month, while the rich would be paying $10,000 a month for each million they had in storage doing absolutely nothing for the economy. Capitalism fails when money becomes stagnant and hoarded and this would actually encourage market fluidity and loans could be given at no interest at all which would further benefit the market and help new businesses get started, encouraging the competition that true capitalism relies on. All the while, the banks would still make plenty of money.

This kind of banking, honest banking, wouldn't penalize the poor for having no money, but rather the rich, for having too much and doing nothing with it. As it is now, the entire system is backward and it's pretty obvious that short of what Iceland has done, the money will continue to flow from the bottom, to the top, and we will continue having depressions, recessions, and "market corrections" as long as they're allowed to use your money to gamble on the stock market.

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