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Old 12-02-2012, 01:56 AM
Danny B Danny B is offline
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Join Date: Oct 2012
Location: L.A. Ca.
Posts: 4,894
Bankers and Morality

Corollary #1 Gold is money
Corollary # 2 All false money is just credit.
Corollary # 3 Credit is just information
Corollary # 4 Capital never self-diminishes.
Banks don't print a bucket of money when you come in for a loan. They give you a bank chit saying that you are approved to receive goods and services from a vendor. Before a bank issues you a chit, they verify that you are a productive person AND they verify that you are likely to choose to repay the chit. The bank makes a judgment of both your prospective productivity and your character (morality).

As long as most of the currency stays in the banking system, nobody gets wise to the fact that the bank doesn't actually have the currency to back all those credits.
This power to dole out chits that can be exchanged for tangibles is a great force.
Lord Acton said that power corrupts. When this corruption occurs, bankers issue chits to people who are non-productive, dishonest or, both. Usually to themselves or to cronies.
Often to government.

The public printers of chits do the same thing. They issue chits to themselves and their cronies (voters). Productive people receive their chits from doing hard work. Non-productive people (bankers and beggars) receive their chits with only a minimum of work. The latter are a drag on society and productivity. They necessarily use subterfuge and force to get their chits. Eventually, the producers get tired of this and withdraw their productivity. The non-producers attempt to use force where genuine motivation is lacking.

Paper money is a chit stating that you have already been productive. Credit instruments are chits stating that you will be productive and moral in the future.
All paper money schemes eventually fail because the emitters of the chits invariably pass out chits to those who aren't honest or productive.

Paper money that is convertible to gold isn't susceptible to over-emission. It is much more difficult to emit gold-backed paper money to persons who are immoral and non-productive.
Gold can't be multiplied, Promises can be multiplied.
Electronic money is even more desirable to those who don't produce.
Imagine stealing $ 1 million in gold from a bank. Then, imagine stealing $ 1 million electronically from a bank. Cyber crime is flourishing.

Current "money" is just information; how productive you have been or how productive you will be in the future. The credit side of "money" is just a judgment on your productivity and morality.
"When Untermyer had J.P. Morgan on the witness stand, he asked him, "Is not commercial credit based primarily upon money or property?"
""Morgan responded, "No, sir, the first thing is CHARACTER."
Before money or property?"

Morgan reassured, "Before money or anything else. Money cannot buy it. [credit]"
FOFOA: Moneyness 2: Money is Credit

Douglas MacArthur said that economic collapse always follows moral collapse. The bankers are now bringing this to fruition.
"Money" is just information and we live in the information age. Bankers created enormous piles of false money to keep their "industry" going. The approaching reality is that the financial industry will shrink to a fraction of it's current size.

In recent years, money-and-credit went up at 6 times that the rate that the GDP grew.
Much of this increase was awarded by the financial industry to,,,, themselves.
The financial industry tries to keep growing at the same time that the productive sector is shrinking. It will eventually be reduced by about 65%.

The fact is; a bank is just an information clearinghouse. They don't produce wealth. They don't store wealth. As the information-age streamlines all businesses, banking will shrink enormously. Banks are tasked with ACCURATELY dispensing credit.
Bankers took on the task of hoarding wealth. They generated loans and fees that were not an accurate representation of risk. The banking industry had become so overcrowded that banks became profit-constrained.

Financial services reached a point where they represented 19% of GDP. That is a VERY good trick for an industry that doesn't produce anything.
There was no profit to be found so, they originated liar loans to keep an income stream.
That blew up so they sold the loans to GOV.
Still looking for income, they took free money from GOV and re-deposited it with the FED at interest.
Still looking for income, they forced the FED into ZIRP in the hopes that they could find "spread" SOMEWHERE.

9 banks hold derivatives with a notional value of $ 228 trillion.
Click to view link
So, why are they lusting for a measly $ 2 trillion sitting on the sidelines?
Generating derivatives was an obvious declaration that profit was not to be found in normal bank business.
Way too many banks with way too little honest profit available. The lifeline that keeps giant zombies alive has drained the producing economy. The golden goose has been starved.
The TBTF banks are kicking and clawing their way to the surface at the expense of the little people. The enabler is the central bank.

The banks aren't the only entity that jumped on the money bandwagon.
Hegel, Marx, Keynes and D.C. have had one hell of a party. The bill is coming due.
"When the accrued expenses of the government's entitlement programs are counted, it becomes clear that to collect enough tax revenue just to avoid going deeper into debt would require over $8 trillion in tax collections annually"
Click to view link
GOV (you and me) accumulate debt at the rate of $ 100 million an hour.
$ 3.87 billion a day.

Kotlikoff says that the actual debt is $ 211 trillion.
Click to view link
This isn't going to end happily.
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