The Genius of Banking: A Personal Account.
10 years ago now, Northern Rock were making 125% loans to anyone and their dog at the height of the credit bubble. I was happy with my 80% loan so failed to take advantage of this free money offer. Lending 125% Loan to Value sounds more risky than it actually is since banks do not loan existing funds but create it as we'll see later. I didn't know that at the time so merrily went about my business going to work and paying the interest on my new mortgage.
September 2007, and the banking system collapses under the weight of fraudulent Mortgage Backed Securities. Northern Rock experienced a run on the bank as customers withdrew their funds.
As the fraud was coming to light disguised as poor business practices, the banks were receiving tax payer's money to keep them from going under. Northern Rock became nationalised. All fascinating news items back then even though the shock wave hadn't reached me.
Of course, the heist didn't stop with our bailout money. The government started turning the screw with their 'Austerity' scam, cutting funding for services claiming we were 'All in this together.'
So slowly the dominoes started to fall. Contracts were cut back, wages were frozen and people started losing their jobs.
March 2009, I got laid off. A direct result of the government's austerity policy trickling down to the company I was working for and my savings evaporated into mortgage credit card payments with no income to sustain them.
This is the genius of banks like Northern Rock:
- The banks create funds on your mortgage application signature. It becomes a negotiable instrument as good as cash.
- They lead you to believe that the funds you created with your signature are theirs and they 'lend' it to you at interest.
- With the contracts exchanged, and you busy painting and putting up shelves, the bank sells your mortgage into a Mortgage Backed Security, getting paid a second time.
- The bankers quietly run the government so they are able run the money mill dry and rake in public money for a bailout
- The dominoes start to fall in the economy, people lose their jobs and become unable to pay their mortgage and the banks repossess their home (I prefer foreclose as the bank possessed nothing to start with).
So what did the bank come away with?
- The value of the loan plus...
- the value of the sale into the Mortgage Backed Security plus...
- your home to be auctioned off ASAP and the bank coming after you for any shortfall.
All from the gift of your signature. Of course, this may be difficult to carry out without your permission which is why your mortgage agreement probably contains a 'Power of Attorney' clause.
At my 'foreclosure' hearing, Northern Rock could not produce the original signed security: they had sold it and were relying on photocopies. I argued that "Would a photocopy of a ten pound note be acceptable for payment?" No, of course not. Neither should a photocopy of a security. Same thing.
For a contract to be valid, it must have consideration (something of value) put up by both parties plus full disclosure. The bank had none of these. The Judge evaded my questions and ruled in Northern Rock's favour even though the lack of note meant they had no proof of claim in law and that they failed to disclose the actual accounting. among other things, Courts appear to be the gate keepers for the banks. Setting a precedent for a bank's fraudulent activities in the mortgage market would set off an avalanche of claims - rightly so. We are in a debt based monetary system. Read the line on your £10 note where it says "I promise to pay the bearer on demand the sum of..."
It's an IOU!!! but for what? Bank notes at one time were receipts for gold deposits, which made sense because you could visit your bank and claim your ten pounds of gold (yes inflation has taken its toll). Also it meant you didn't have to lug around ten pounds of gold since the note was for the 'bearer,' the holder of the note, and not in the name of the depositor. These days a bank note is an empty promise surviving solely on collective delusion.
Notes in other countries may state that "This note is Legal Tender" and backed by a Legal Tender act. But, again, backed by nothing of value, its value being enforced by statute: <a href"http://www.investopedia.com/terms/f/fiatmoney.asp"fiat currency
Therefore, the more money there is, the more debt there is. Plus the interest that is added can never be repaid since that was debt created without its cash counterpart.
Had I known about the banking and monetary system as much as I did back then, I would have taken the 125% loan and burned my credit cards, since they are in the business of extending credit without backing it with existing funds. Each receipt is entered as an accounting asset and liability but the source of the money is, once again, us.
It's easy to react with "But if you borrowed the money, you should pay it back!" But this is the point. You don't OWE anything because you don't BORROW anything, you create funds with your signature, pin number or any other method of authority the bank associates with your name. And we are duped into believing that there are real funds behind the numbers. It may have been like that a few hundred years ago but not today.
We are constantly creating funds as we 'borrow' which is the real source of inflation. Inflation is not the cost of goods going up. It is the value of money going down. To help understand this. Imagine a pizza and you have one voucher that says you are entitled to pizza. If only one voucher exists then you get the whole pizza. Before you have a chance to tuck in, another voucher is created and another person arrives to claim the pizza, they both get a piece so they get half each. Two more vouchers are printed and two more people arrive so they get a quarter slice. The Pizza is the same size but is now worth four vouchers simply because the vouchers were created. Each voucher printed means a thinner slice. Change the pizza to global resources and vouchers to currency and the effect is the same on a greater scale.
The whole Central Banking monetary system is a giant Ponzi scheme waiting to collapse under its own weight. Supported merely by the belief in the lie that this currency has value. The same belief that gave the tulips value during the tulip mania of 1636.
The indicators that preceded historical collapse of empires (see The Hidden Secrets of Money in the resources below) are suggesting that our system is nearing collapse and likely be worse than 2007/8. I wouldn't want to be in fiat currency when that happens, especially as the banks tend to "go on holiday" when times are tough. It might be tomorrow, it might be 20 years.
Of course you can hold what you want but Gold and Silver are always robust in hard times and do not depreciate like paper money in a crisis. And we have a new phenomenon. Bitcoin and Altcoins. Maybe they are like the tulips of 1636 but I don't think so. The blockchain has real value and it cuts out the parasitic middle-men bankers. If the monetary system collapses then another will be needed as a replacement. Cryptocurrencies are ready - even for the mainstream, at a push. Other than that there is barter, but I suspect the banksters have something lined up that looks like cryptocurrency but will reside on a central system instead of a distributed ledger. Just a guess on my part but seeing the trend over recent decades over control and restriction over money, and unless I've overestimated them, there will be something waiting that pushes the "anti-moneylaundering" agenda, eliminates cash and can be controlled centrally.
The Creature From Jeckyll Island, G Edward Griffin
The Money Masters, Bill Still (Movie available on Youtube)
The Hidden Secrets of Money, Mike Maloney
Money As Debt, Paul Grignon
How I Clobbered Every Bureaucratic Cash-Confiscatory
Agency Known To Man, Mary Elizabeth Croft (Free PDF)
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well written, I cant understand why people dont take a sec and think about our monetary system, specially in times like these when we might have a solution.
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In my case, I believed the old paradigm so long that I found it hard to believe the scale and complexity of the Central Banking mechanism behind mortgages and currency creation. Without the Internet, I don't think I would have found much info at all.
I visited the Bank of England museum and was surprised (not) to find hardly anything to support anything other than the traditional model of currency, apart from admitting the currency was no longer backed by gold.
The museum also claimed that the bank was nationalised in 1946 and claims it is Government owned. That appears to be true on paper but what is not disclosed are the secret list of Bank of England shareholders.
it is argued that the Bank of England is there to better control monetary policy and inflation. Well, the same could be achieved via a regulatory body over the Treasury, which still has legal power to create its own money. So why not do that have the Treasury issue currency interest free rather than have the government exchange interest bearing Bonds for the Bank of England's Currency ? Interest that is paid out of the income tax of the people of the land.
This structure is highly suspicious and appears to be shrouded by secrecy and a misleading story. i think we have to go over the Atlantic to take a look at the Federal Reserve Bank of the USA to see how this really works as it appears to operate in the same way as the Bank of England, which it was probably based on.
The difference with the Federal Reserve {Private, not Federal; and has no reserves.) is that the Federal Reserve is run by a board of directors that represent the biggest private banks in the US. what's more, the Federal Reserve is exempt from auditing
The Bank of England is overseen by a board of directors, known as the Court of Directors, who are appointed by the Queen on the recommendation of the Prime Minister and the Chancellor. The bank has a wholly owned subsidiary called BANK OF ENGLAND NOMINEES LIMITED, a private limited company with 2 of its 100 £1 shares issued. This company is special as its protected by the official secrets act, its Royal Charter status and is exempt from the normal disclosure requirements that other companies have to comply with to meet section 27 of the Companies Act 1976.
The reason being is that the major players in the world of finance including the Queen of England and other Royal families use this company to purchase shares and remain anonymous.
However the Bank of England Nominees company accounts are not exempt from any laws regarding companies and they must file their accounts as every company must do which can then be accessed through the Company House website. It is interesting to note however that the latest Bank of England Nominees LTD accounts say that:
"There has been no income or expenditure on the part of the Company since its incorporation and accordingly no profit and loss account is submitted.”
It seems to me that the Bank of England have their secrets well covered and that the Federal Reserve has a more conventional structure, less hidden from the light. Other than that, they operate in similar ways, creating money out of nothing and taking the people on the interest created upon it. Along with mortgage creation, this has to be the worlds biggest scam.
The Blockchains like Bitcoin are a huge deal. Much more than most of us know since it bypasses the parasitic banking cartel.
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