Banks As Government

The clueless Obama just claimed that bankers' bonuses are no more shocking than athletes' incomes. According to him, it would be against the free market to be against said bonuses.

But of course bankers are getting all their money from the government. Banks are not about the "free market". They are about the mechanism to create money that can be used in the market, and all over the economy. "Private" banks have recently been endowed with a prerogative governments kept for themselves for millennia. Apparently Obama does not know any of this.

A way to support banks has been by giving them hundreds of billions through TARP (which I mockingly called at the time: Transfering Assets To Rich People).

Another way has been to buy mortgages using taxpayer money to keep interest on mortgages low. This is not innocent as it looks. In connection with the FHA back-up of most new real estate loans, it is mostly a government run subprime program to the benefit of bankers and real estate flippers. What is the interest for the bankers and their White House? In light of a FEW transactions to flippers (or to the banks themselves!), it allows bankers and White House to claim houses are really worth a lot, therefore principals should not be lowered (a cornerstone of the friendly-to-bankers policy).

Another way to help banks is for the government to give them money at basically zero interest, and then allow them to re-invest the same money with the same government, at 3.5% interest.


More fundamentally, the main support to the banks has been the FRACTIONAL RESERVE SYSTEM. It allows private, unelected, unsupervised individuals called the bankers, to create the money society uses. Moreover, it is created under the form of debt. Thus it tends to increase and put the vast majority of People into two categories: those without money, completely out of society, a sort of underclass, and those who are over-indebted.

The Fractional Reserve System [FRS] makes bankers enormously powerful, because it makes them in control of most of the money (under a reserve requirement of 10% they control about 4/5 of it all; it can come arbitrarily close to 100% as the reserve requirement is allowed to go down to zero).

Rothschild actually explained, more than two centuries ago, that the FRS made bankers into the people who controlled nations.

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