Posts Tagged ‘Loans’

BANK ROBBERY – HOW BANKS STEAL FROM EVERYONE

February 1, 2014

Article from the Positive Money Website – the campaign to reform the corrupt and self evidently broken monetary system

http://www.positivemoney.org.uk/wp-content/uploads/2012/06/Banking_Vs_Democracy_Web.pdf

Written By: Andrew Jackson and Ben Dyson 

Special thanks to: Anthony Molloy

Produced with the support of The JRSST Charitable Trust

© February 2012 Positive Money

PRIVATISATION BY STEALTH

The common misconception of how banks work is

that they take people’s savings and lend them out

in the form of loans. In this vision, banks merely

operate as the middlemen between savers and

borrowers, but this is simply not what happens.

When a bank makes a loan it does not take the

money out of anyone else’s account. Instead, it

simply creates a new account for the customer and

types a number into it.

When a customer is approved for a loan (of say

£1,000), she signs a contract with the bank obliging

her to pay back £1,000 plus interest over a period

of time. According to accounting conventions, the

£1,000 loan can then be recorded as an asset of the

bank. At the same time the bank opens an account

for the customer and types £1,000 into it. As the

bank owes the customer this money, it is recorded

on the liabilities side of the bank’s balance sheet. By

this process, the bank has simultaneously created

new money in the borrowing customer’s account

and a corresponding debt. The bank’s new asset

(the debt) balances out the new liability (the newly

created money) so that in accounting terms, the

books balance.

The customer now has £1,000 of new money to

spend on whatever they choose. No money was

taken out of anyone else’s bank account. New

money has been created out of nothing.

In the UK, over 97% of the entire money supply was

created in this way and exists in the form of ‘digital’

money, numbers in the bank accounts of members

of the public and businesses.

NO ACCOUNTABILITY TO CUSTOMERS

Unlike pension funds, banks are not required to

disclose how they will use their customers’ money.

As 97% of the UK’s money supply is effectively held

with banks, this allows them to allocate a larger

sum of money than either the entire pension fund

industry or the elected government itself. Conse-

quently the UK economy is shaped by the invest-

ment priorities of the banking sector, rather than

the priorities of society.

Just five banks hold 85% of the UK’s money, and

these five banks are steered by just 78 board

members whose decisions shape the UK economy.

This is a huge amount of power concentrated in very

few hands, with next to no transparency or account-

ability to wider society.

******

It is common knowledge that anyone found printing

their own bank notes can expect to find the police

kicking down the door at two o’clock in the morning.

However, it has only been illegal for individuals and

companies to create their own £5 or £10 notes since

1844.

Prior to 1844, the state had a legal monopoly only

over the creation of metal coins dating from the

time when this had been the only form of money.

But keeping lots of metal and carrying it around was

inconvenient so customers would typically deposit

their metal coins with the local jeweller or goldsmith

who would have secure storage facilities. Eventually

these goldsmiths started to focus more on holding

money and valuables on behalf of customers rather

than on actually working with gold, and thereby

became the first bankers.

A customer depositing coins would be given a piece

of paper stating the value of coins deposited. If the

customer wanted to spend his money, he could take

the piece of paper to the bank, get the coins back,

and then spend them in the high street. However,

the shopkeeper who received the coins would then

most likely take them straight back to the bank. To

avoid this hassle, shopkeepers would simply accept

the paper receipts as payment instead. As long as

the bank that issued the receipts was trusted, busi-

nesses and individuals would be happy to accept the

receipts, safe in the knowledge that they would be

able to get the coins out of the bank whenever they

needed to.

Over time, the paper receipts came to be accepted

as being as good as metal money. People effectively

forgot that they were just a substitute for money

and saw them as being equivalent to the coins.

The goldsmiths then noticed that the bulk of the

coins placed in their vaults would be gathering dust,

suggesting that they were never being taken out.

In fact, only a small percentage of all the deposits

were ever being claimed at any particular time. This

opened up a profit opportunity—if the bank had

£100 in the vault, but customers only ever withdrew

a maximum of £10 on any one day, then the other

£90 in the vault was effectively idle. The goldsmith could lend out that extra £90 to borrowers.

However, the borrowers again would choose to use

the paper receipts as money rather than taking out

the metal coins from the bank. This meant that the

bank could issue paper receipts to other borrowers

without necessarily needing to have many—or even

any—coins in the vault.

The banks had acquired the power to create a substitute for money which people would accept as being money. In effect, they had acquired the power to create money: perhaps this is when the goldsmiths became real bankers.

The profit potential drove bankers to over-issue

their paper receipts and lend excessive amounts,

creating masses of new paper money quite out of

proportion to the actual quantity of state-issued

metal money. As it always inevitably will, blowing

up the money supply pushed up prices and destabi-

lised the economy (of the many crises, particularly

galling was the Bank of England having to borrow £2

million from France in 1839). In 1844, the Conserva-

tive government of the day, led by Sir Robert Peel,

recognised that the problem was that they had

allowed the power to create money to slip into irre-

sponsible private hands and legislated to take back

control over the creation of bank notes through the

Bank Charter Act. This curtailed the private sector’s

right to print money (and eventually phased it out

altogether), transferring this power to the Bank of

England.

However, the 1844 Bank Charter Act only addressed

the creation of paper bank notes. It did not refer to

other substitutes for money. With growth in the use

of cheques, the banks had found another substitute.

When a cheque is used to make a payment, the

actual cash is not withdrawn from the bank. Instead,

the paying bank periodically communicates with the

receiving bank to settle any net difference remaining

between them once all customers’ payments in both

directions have been cancelled out against each

other. This means that payments can be made even

if the bank has only a fraction of the money that

depositors believe they have in their accounts.

Following on in the spirit of financial innovation,

after cheques came credit and debit cards, elec-

tronic fund transfers and internet banking. Cheques

are now almost irrelevant as a means of payment

but over 99% of payments[b] (by value) are made

electronically.

Today the electronic numbers in your bank account

do not represent real money. They simply give you a

right to demand that the bank gives you the physical

cash or makes an electronic payment on your

behalf.

In fact, if you and a lot of other customers

demanded your money back at the same time—a

bank run—it would soon become apparent that

the bank does not actually have your money.

For example, on the 31st of January 2007 banks held

just £12.50 of real money (in the form of electronic

money held at the Bank of England) for every £1000

shown in their customers’ accounts. Even among

those who are aware that what banks do is more

complicated than merely operating as middlemen

between savers and borrowers, there is a wide-

spread belief that banks are obliged to possess a

sum corresponding to a significant fraction of their

liabilities (their customers’ deposits) in liquid assets,

i.e. in cash or a form that can be rapidly converted

into cash. In fact, such laws were emasculated in

the 1980s in response to lobbying from the industry

(although some effort is now being made to

re-impose such rules in the aftermath of the crisis).

When a run starts (like the one on Northern Rock

on the 14th September 2007) it becomes almost

impossible to stop.

Once the bank has paid out any cash which it holds in the branch to individuals (and transferred all of its reserves to other banks) other depositors will have to wait for the bank to sell off its remaining assets before they see their money.

And because the bank has to sell these assets

quickly, it will find it hard to receive a fair price.

Because of this it is unlikely the proceeds from these

sales will cover the value of their deposits and other

liabilities, and therefore most customers are likely to

lose a large proportion of their savings. Because this

type of personal ruin is a tragedy and, even more

importantly, because one bank run is likely to lead

to others (as confidence in the banking system falls

through the floor) the government insures deposits,

guaranteeing some level of payback in the event of

bank failure. Thus, because the system is inherently

unstable, and because almost all of our money

exists on banks’ balance sheets, the banking sector

has to be underwritten and rescued by the taxpayer,

all as a result of the failure of legislation to keep up

with technology and financial innovation since 1844.

******

When money is created, it can be put into the

economy in two ways: it can either be spent in

exchange for goods and services or lent out. When

banks create money, they put most of it into the

economy through lending. Exactly who this newly-

created money is given to is crucial because it will

determine the shape of the economy.

Over the decade leading up to the 2008 financial

crisis, the amount of money lent out by banks

tripled but this steep rise is largely accounted for by

loans advanced for the purposes of buying property

and for financial speculation. The amount dedicated

to productive investment remained more or less

constant throughout this period meaning that the

proportion of the money supply that was dedicated

to enhancing production steadily waned.

*****

Between November 1982 and November 2006 the

banking sector increased the money supply—by

creating new money through lending—by an

average of 10% a year.

Between November 2007 and November

2008, £258 billion of new money was created. If

government were to increase the money supply

at this rate, it would be accused of following the

policies of Zimbabwe, but because few people

understand that banks create money via lending,

this is completely overlooked.

This huge growth in the money supply is hardly

surprising when we consider the incentives that

banks have to increase their lending. In confident

times, all of a banker’s incentives push him to

lend as much as possible: by lending more, they

maximise short-term profits and, more specifically

their own bonuses, commissions and prospects

of promotion and profits. There is no reward for

bankers who are prudent and choose not to lend

or only lend judicious sums. In short, the supply

of money into the economy depends on the confi-

dence and incentives of bankers rather than what is

best for society as a whole.

Investing in machinery to make factories

more efficient is productive investment whilst

lending to buy existing property through mortgages

is non-productive as it simply pushes up house

prices without increasing production.

The £1.16 trillion of new money created by

the banks over the last ten years could have been

used to: pay off the national debt (which currently

stands at around £977 billion); invest in public

transport, hospitals, schools or renewable energy;

or exempt the poorest ten per cent of the popula-

tion from tax. Instead, it has been used by the

banking sector to fuel a housing bubble that has

made buying a home unaffordable for all but the

very rich.

The last few years have proven the business model that enables banks to create money is fundamentally unstable, requiring rescue by the government from time to time.

When this happens, taxpayer funds are diverted

from public spending and spent on salvaging failing

corporations. This further reduces the power of

government to do what it was democratically

elected to do, weakening democracy in the process.

By handing the power to create money over to

the banks, the government reduces its revenue,

compromises its capacity to carry out the activities

that it has been mandated to carry out and under-

mines the potential of the democratic system to

change society for the better.

THE HIDDEN TAX THAT BANKS POCKET

Giving banks the power to create money results in

two hidden and undemocratic ‘taxes’ being levied

on the public.

The first of these ‘taxes’ is inflation, when increases

in the amount of money in the economy feed

through into higher prices. If the money supply

is increased quickly then the new money pushes

up prices, especially in housing to where much of the new lending is destined.

Of course, it is now banks that create the vast

majority of new money. They have increased the

amount of money in the economy at an average of

10% a year between 1981 and 2007, (by lending)

and pumped this money mainly into the housing

market.

As a result, house prices shot out of the

reach of ordinary people, whereas those who got

the ‘first use’ of the money (by borrowing first)

received most of the benefit. Meanwhile those who

were not already on the housing ladder became

significantly poorer, in real terms, because the

relative cost of housing doubled in just 10 years

(between 1997 and 2007).

Consequently, the inflation caused by allowing banks to create money is also effectively a ‘tax’ accruing to the banks (through their increased interest income on ever greater mortgages) and those who borrow early on (to buy property and other assets).

The second of these hidden taxes corresponds to

interest. Because banks create 97% of the UK’s

money supply, essentially through making loans,

the entire money supply is ‘on loan’ from the

banking sector. For every pound created, somebody

somewhere goes one pound into debt and starts

paying interest on it. By virtue of their power

to create money, banks have the right to collect

interest on nearly every pound in existence.

A hidden tax collected by private corporations

because they have a power that most people would

consider—and believe—to be a prerogative of the

state can hardly be considered democratic.

Written By: Andrew Jackson and Ben Dyson

Special thanks to: Anthony Molloy

Produced with the support of The JRSST Charitable Trust

© February 2012 Positive Money

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A RADICAL NEW WAY OF HOME OWNERSHIP

April 15, 2013

April 15  2013

I have an idea !

Well, actually, I partially nicked it from the Co-op movement. It is already up and running; I just want to do it bigger & better, so to speak.

I want to organise an alternative way of  both renting and buying a home. The idea would be to make it easier and cheaper to either rent or buy, completely bypassing the banks and other traditional mortgage lenders or private landlords.

It will almost certainly be a housing Co-op which would be a non profit making organisation with members having an equal say and equal voting rights in how it is run.

My ambition, ideally, is to set up an organisation which will ultimately attract money from Joe public (internet based crowdfunding ?) to assist it’s funding and it will tap the usual mortgage lenders available as well. As time goes on  the organisation will be able to build up it’s own capital and increasing funding abilities. The general aims are:

– To offer an infinitely more reliable and attractive rental model than the vagaries of the current private landlord  buy to let market, whereby tenants can choose to remain tenants on  exceptionally attractive terms compared  with what is currently available in either the private rental market or the social housing market, or they can become homeowners utilising only their rental history if that is their only source of funding.

– To enable tenants to become homeowners by means of using their rental incomes in an appropriate manner, probably exactly similar to a rare but existing model already set up by a housing co-op.

– To actively expand the organisation as far and wide as possible to make it very widely available – ultimately ideally throughout the country.

– To use marketing and publicity skills to do this in order make the public widely aware  of an alternative method of a more ‘user friendly’ concept of accessing housing, sweeping away much of the expensive nonsense which has been largely generated during the past few decades in both the rental market and the house purchase market.

The housing market, whether buying or renting, was utterly different sixty or seventy years ago. Since then layers of utter nonsense have been imposed on it, making it increasingly expensive to either rent or buy. Most of this expensive, restrictive & thoroughly poisonous nonsense has been driven directly and indirectly by the banks who have been the architects responsible for shaping the entire housing market as it currently stands.

Because of this the cost of buying a house has soared from about three times  a person’s annual income to about ten or eleven times today. Equally, rental costs have soared to unaffordable levels too. The only beneficiaries are really only banks and private landlords. All other classes of home occupiers are disadvantaged and will continue to be so until something changes this.

All this is only likely to get worse until the stranglehold of the banks on the housing market is broken. The only way this can be achieved is to provide the sort of alternative I have in mind, whereby, ultimately, funding for housing will be increasing taken away from the banks and put into the hands of existing homeowners and ‘Joe public’ who will find it attractive to place savings to be used to fund home purchase because their savings will be safer than with banks and return a higher amount of interest on any loans made for home purchase than the banks normally pay to savers.

It becomes possible to understand this can be done simply by imagining a private landlord setting up in business to borrow money to buy homes to rent to people and instead of the profit becoming  owned by the landlord, the profit is used only to expand the business and enable the tenants to both rent on far more attractive terms than elsewhere or to eventually own their own home.

I would wish to explore the possibility of turbo boosting what I have in mind by enrolling high profile help from others. Possibly, for example, certain existing housing trusts, charities and others to be considered in due course.

There are ‘social lenders’ out there who lend at low interest rates for housing purposes. And, interest bearing shares can be marketed in a ‘Community Land Trust’.

Is anyone interested in becoming involved in this ?

Here are some interesting web sites to have a look at.

Leave a comment if you might be interested in becoming involved in any way – either by becoming a member or just helping to organise it.

http://www.somerset.coop/landtrust

 

http://www.somerset.coop

http://www.uk.coop 

http://www.co-operative.coop/enterprisehub

HOW MONEY IS CREATED

October 7, 2011

October 7th 2011

This is copied from the POSITIVE MONEY website at http://www.positivemoney.org.uk/

How Money is Created: A bank is able to extend more money than it actually has in its reserves. That means, that if you want to borrow £10,000, the bank can write those digital numbers into your account even though it doesn’t actually have £10,000. What it does have is faith that you will pay £10,000 back…in real money…that you’ve worked for.

Now if you don’t pay it back, if you default, then the bank has to mark that £10,000 down as a real loss. So there is a risk there! The bank can create money that doesn’t exist, but if you don’t pay it back then the amount will represent a very real loss for the banks. That is what has been happening in the last few years. Banks making big losses on bad loans.

This new money, created by the banks, exists simply as electronic digits in your account. Today, around 97% exists only in electronic format.

Created and lent electronically – in an intangible way – and spent largely with plastic cards.

Banks have created all this new money, out of nothing, and loaned it into society, but they have done so imprudently, and now they are feeling the pain as the defaults start rolling in…and the banks have to account for them as real losses.

Consequently, they are afraid to lend out (effectively create) any more.

So…to recap…banks can extend more money than they have in reserves – and this means they effectively create new money every time they make a loan…and they enjoy the privilege, profit and power which comes from creating the national money supply in this way. Every time banks extend new credit, they are effectively creating new money.

Are you sceptical of that claim?

Well, here is Martin Wolf, Chief Economics Editor at the Financial Times. He says, “The essence of the contemporary monetary system is creation of money, out of nothing, by private banks’ often foolish lending.” (The Financial Times, 9 November 2010.)

Here is President Obama: “…the truth is that a dollar of capital in a bank can actually result in $8 or $10 of loans to families and businesses. So that’s a multiplier effect…” (President Barack Obama, “Remarks by the President on the Economy”, Georgetown University, Washington, D.C., April 14, 2009.

Britain’s money supply is not, contrary to popular belief, created by the Bank of England.

It is created overwhelmingly by the High Street banks, every time they make new loans…by multiplying upon the basis of their actual real reserves.

Banks creating this electronic money out of nothing…has become the way in which virtually all money is supplied to our economy.
 
Now that has consequences for us all.

The first is a democratic consequence! 

The natural state of our economy is to be held hostage to the banks!

The health of our economy is utterly dependent upon the health of the banking sector.

When the banks go down, as a consequence of their “often foolish lending”, they take us with them. 

When the banks fail to lend, because they have decided they need to be more prudent…then – while that may be a sensible business decision for them, as companies – it means, for us, that no money comes into society! 

Our economy goes into recession because there is no new money being created and entering society. 

As a society we have no control over the financial decisions of these private companies. Now, if banks were like all other private companies, then that would not, necessarily, matter so much…but when these companies represent the creators of our very means of exchange, the very life blood that our economy needs to function, then that is a serious problem.

We have allowed them to be in a position where they can turn the tap on and off depending upon their own business decisions.

Fine for them as private companies, but bad for us as a society.

It is a premise of the Positive Money proposal that we should not, as a society, be so dependent upon these companies in this way. In short, the Money Supply is a democratic issue.

Let’s be clear…the Positive Money proposal here is not to nationalise the banks (that wouldn’t make any difference at all if we kept the system as it otherwise is), the proposal is to “nationalise” – which is so say, bring under public control – the money supply…and we have a fully worked out plan which will do exactly that…which I’ll get to.

And of course there are other consequences. The Positive Money website does a very good job of listing these. At present it is engaged in a research project which is detailing many of these…
 
So three questions arise:

1. Is there some way that the national money supply can be publicly-owned by the people and for the people – rather than by the banks and for the banks?  In effect, this means, is there some way that it can be operated by a national institution owned by the public? 

2. Is there some way this money supply process can be made subject to democratic control and accountability, which in effect means through the mechanism of elected politicians and Parliament – unlike at present where there is no democratic control over the unaccountable corporations which create the money supply as a private, profit-making venture; and

3. Is there some way that we, the people, can enjoy the profit from creating the national money supply. In effect that means some way in which the profits can go directly to the public purse at the Treasury – rather than at present where the corporate banking system enjoys the privilege and profit of that power?
 
And the answer, you’ll be pleased to hear…is yes, there is a way! 

Let’s summarise it in two steps… 

Step 1. Commercial banks to be forbidden from creating money out of nothing. All money to be created by a national institution accountable to us democratically through Parliament.

This money will be created “debt-free”, and accounted as such. That means, it will be created and simply spent into society by Parliament in the usual way, via spending in the public and private sectors.

That money will then circulate in society. 

Step 2. The commercial banks will then compete with themselves to attract that money so created, into their savings accounts, and lend out only that money which they have acquired in that manner.

This will not result in inflation since the banks will be unable to multiply up new loans on the basis of any new money they receive.

Our economy will be safe from the consequences of bank failure because we will no longer be relying upon the commercial health of the private banking sector for our national money supply.

In time, it is possible that overall levels of personal and national debt may decrease, rather than rise exponentially as they do at present.
 
Furthermore, Positive Money, as a consequence of 2 years careful work, has assembled this reform in proper legislative format, as a potential draft Westminster Bill, which they have entitled “The Bank of England (Creation of Currency) Bill”. It is an astonishing piece of work, which represents the collective work of many dedicated people, and hard copies of this 60 page A4 Manual are available for a donation to Positive Money.

It can also be read on the Positive Money website here

Revealed: Reckless UK lending of Lehman arm

March 9, 2011

RECKLESS AND RUTHLESS: Files show how aggressive lenders peddled mortgages borrowers couldn’t afford and pursued them when they failed to meet payments

By Richard Dyson of the Daily Mail – This is Money

5 March 2011

Aggressive mortgage lending to high-risk borrowers by a British subsidiary of defunct US investment bank Lehman Brothers at the height of the property boom has been fully revealed for the first time in files obtained by Financial Mail.

These relate to almost 10,000 mortgages advanced in 2006 by Southern Pacific Mortgage Loans. The loans were quickly sold to investors.

This process, on a global scale, triggered Lehman’s collapse in September 2008 and was central to the banking crisis.

Investors were persuaded to buy mortgages because they would, supposedly, earn a regular income from the interest paid by borrowers, as well as have security over the property.

Even before the crisis, SPML raised eyebrows for its lax lending. But the scale of recklessness is made public here for the first time.

Our analysis of SPML’s 2006 lending has found that three out of five mortgages were ‘liar loans’ – offered on a ‘self-certified’ basis where borrowers were not required to prove their income. A third of the mortgages were interest-only, where capital does not have to be repaid until the end of the mortgage term.

One in five borrowers had court judgments against them for uncleared debt elsewhere, averaging £4,400, at the time the mortgages were lent. Mainstream lenders will not advance mortgages to someone with a court judgment who has not paid off the debt.

Two in five of the loans were for 80% of the property’s value or more, with some mortgages equating to as much as 95%. Compare this, for example, with a conservative lender such as Nationwide Building Society, whose average outstanding loan is for less than half the value of the property it is secured against.

The data also gives a shocking, if unsurprising, picture of how quickly SPML’s borrowers fell into difficulty.

By March 2009, of SPML’s mortgages originally lent in 2006 and still in force, 40% were three months or more in arrears. Almost 10% were over 12 months in arrears.


Silent: Acenden’s Amany Attia

Scores of mortgages had been in arrears for more than 24 months, indicating that some borrowers fell behind as soon as the money was lent. Citizens Advice describes this lending as ‘set up to fail’ – with lenders cynically advancing money in the knowledge that borrowers couldn’t afford the repayments.

Interest rates on remaining SPML mortgages dating from 2006 now average 7.09%, but some unlucky borrowers are paying more than 16%. Two in five borrowers pay 10% or higher.

The files also reveal how relentlessly SPML borrowers have been pursued through the courts, frequently losing their homes. Of borrowers-whose 2006 mortgages remain in force, almost 40% have had some form of litigation brought against them by the business that administers SPML’s remaining loans.

This business is called Acenden, but is better known – and reviled by borrowers – as Capstone, a name it ditched last year in a bid to reinvent itself. Capstone was owned by Lehman until the bank’s collapse.

Today, Acenden is profitable and managed, and part-owned, by former Lehman bankers who spearheaded the original lending. This includes Acenden chief executive Amany Attia, who came to Britain in 2001 to introduce Lehman’s discredited US mortgage lending processes in this country. She declined to comment.

The data that Financial Mail has analysed relates to just one tranche of SPML’s lending, but is representative of the billions of pounds lent by SPML and equivalent businesses. Acenden refuses to publish the numbers of repossessions it has secured relating to the mortgages it administers.

However, it is estimated by Citizens Advice, for instance, that such lenders seek ten times the number of repossessions sought by mainstream lenders, even though their share of the total mortgage market is about one twentieth.

Forgery victim’s five-year ordeal (more…)

CONCLUSIONS OF THE FINANCIAL CRISIS INQUIRY COMMISSION

February 3, 2011

CONCLUSIONS OF THE FINANCIAL CRISIS INQUIRY COMMISSION – Published by United States Government January 27th 2011

– Stupidity & fraud mostly

The reason I found the CONCLUSIONS OF THE FINANCIAL CRISIS INQUIRY COMMISSION report relevant is that it uses fairly easy to understand layman’s language to describe the appalling immorality of the sub-prime mortgage industry, together with it’s devious inclinations and mis-representations and mis-selling to householders which has resulted in millions of re-possessions in the USA and quite a few in the UK.

The report sheds light & understanding of how ghastly the banks were in deliberately manipulating the entire global economy in a frenzy of greed which not only caused millions of re-possessions, but even greater economic destruction of many countries’ entire economies.

The report is relevant because a very small number of banks, operating globally, had and still have, a stranglehold on World finances & economies. They took over the mortgage market which all householders rely on for financing home purchase, and used their deviousness to deliberately drive up property prices and the costs of mortgages to milk millions of people who were reluctantly forced to use their unpleasantly devious usurious loans to buy family homes.

This whole dishonest saga started off in the USA and spread to the UK as the American banks moved to London to operate within the UK.

So the American CONCLUSIONS OF THE FINANCIAL CRISIS INQUIRY COMMISSION report is relevant to us as the problems in the UK were directly imported from immoral dishonest banks in America. The American report makes this fairly clear.

The UK is suffering precisely the same financial problems as the USA, caused in both countries by the same mechanism and by the same banks. It is one and the same problem.

CONCLUSIONS OF THE FINANCIAL CRISIS INQUIRY COMMISSION

The Financial Crisis Inquiry Commission has been called upon to examine the financial and economic crisis that has gripped our country and explain its causes to the American people. We are keenly aware of the significance of our charge, given the economic damage that America has suffered in the wake of the greatest financial crisis since the Great Depression. Our task was first to determine what happened and how it happened so that we could understand why it happened. Here we present our conclusions.

Read the rest of the report by clicking below:

fcic_final_report_conclusions

FULL USA GOVERNMENT FINANCIAL CRISIS INQUIRY COMMISSION REPORT – 634 PAGES HERE

SILLYFLATION – THE FASHIONABLE NEW IMPORT FROM ZIMBABWE !

January 29, 2011

(This article is repeated from way back in Boz’s archives, when he predicted inflation was on its way as long ago as March 2009. I take no smug pleasure in being proved right. Inflation will go through the roof soon; you ain’t seen nothing yet ! )

.

You too can will shortly be carrying your loose change around in a wheelbarrow just to buy a loaf of bread or pint of milk, exactly as they have been doing for ages in Zimbabwe.

Governor of the Bank of England, Mervyn King, announced today ( that would be back on March 5th 2009) that Goofy Gordon and the Darling Chancellor have cooked up another wheeze with the Bank of England to destroy the UK economy even more than it already has been by the greedy, unprincipled, immoral, banks.

Gordon’s great idea, with Mervyn King’s connivance, is to print lots and lots more bank notes. This is because the banks are hoarding all the money they can lay their sticky, dishonest little fingers on and no one else has any money to buy anything with.

No doubt the banks will get their hands on that new money too for a while, and the Government will be forced to print more and more pretty little bank notes with the fairytale idea that all those impressively printed and colourful little bits of paper will have real value and worth, and people will be convinced they are rich enough again to be able to spend money to buy things, employ people to make them, and generally kick-start the economy.

Garbage ! What it really means is the economy will nosedive even further and inflation never before experienced outside of Third World comedy economies like Zimbabwe will take root in the UK.

Well done Gordon and cronies. You did it yet again !

What would do wonders for solving the economy here and the rest of the World would be to arrest a few bankers and charge them with fraud and throw them in jail for a while. That might encourage banks to stop behaving like thieves and try and be a bit more honest in their dealings.

It is purely the deceit and dishonesty of the banks which have caused this global economic crisis, so the people responsible should be punished. They undermined everybody’s trust in money and the entire system of banking as they committed more and more fraud of one sort or another. They ended up not even being able to trust each other. There’s no trust among thieves, the old saying goes.

That certainly proved right in the case of the banks !

It might be a good idea to let the whole lot of them go bankrupt and completely reform the entire banking system at the same time.

The banks have proved they cannot be trusted to run the financial system, so it needs to be done differently, more intelligently, and by more honest organisations.