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Old 12-12-2012, 03:35 AM
Danny B Danny B is offline
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Join Date: Oct 2012
Location: L.A. Ca.
Posts: 3,695
Banking and currency creation

Many decades ago, Howard Hughes built an empire based on aviation. He designed and built planes. He owned airlines. He became the first billionaire entrepreneur.
In 1992, George Soros created synthetic instruments to "short" the British pound. He kept attacking and finally broke through. He collapsed the pound and profited about $1 billion dollars.
Black Wednesday - Wikipedia, the free encyclopedia

This has been an increasing trend for decades. Rather than do anything productive, the financial industry bets back and forth and makes a killing.
Mergers and acquisitions, hostile takeovers followed by asset gutting of the target.
Often, there wasn't enough profit to be made legally. The S&L scandal is a perfect example. Power groups got the law changed and made off with $! trillion. About 1,000 went to jail. Fraud became endemic. It took the bankers 19 years to get rid of the Glass-Stegal law. That and a few other changes have made it very difficult to put anyone in jail for fraud.

This short vid explains the early genesis of banking.
The Goldsmiths Tale - YouTube
Banks originally started out as a safe place to store valuables. Today, they store very little of any intrinsic value. The only legitimate function of a bank is to allocate credit.
Since they have the power to create credit out of thin air, they naturally create lots of credit for them selves. As long as they invest it wisely, they can't lose. This is a great temptation to buy up everything in sight with all that free money. They profit in many ways. You and I have to work to produce currency. They just print it.

They have been getting away with it for quite some time.

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."
Henry Ford

The trend is; more and more people invest money rather than actually do something productive.
Fewer and fewer people are actually employed in the productive sector.
Employment participation has been going down for decades.
Productivity has been going up but, that INCLUDES the financial sector. The financial sector accounts for about 9% of GDP.

The only possible way that it can do that is by printing. The banks have another way to gain money. They push credit on people they know can't pay. They foreclose on the property and sell it again. This is especially lucrative when GOV backs the loans. Now the banks are insolvent. GOV can't rescue them because GOV is insolvent.

Nobody actually wants to work.
"Cash settlement” instruments are synthetic devices. They have no other purpose than to transfer cash from one entity to another by manipulating an underlying index number from
one moment to the next, one month to the next.

Nothing REAL is produced, created or even traded. On expiration, money is just transferred automatically into or out of accounts of those who have placed their bets. No more, no less."
Charleston Voice: The Role of Cash Settlement in Market Manipulation and in the Panic of 1987

GOV liabilities are at $211 trillion.
Kotlikoff Sees U.S. Fiscal Gap of $211 Trillion: Video - Bloomberg
The situation has been compared to; two drunks holding each other up.

Then there are the states. They've dug a big hole for them selves.
"In the West Contra Costa Schools' case, that $2.5 million bond will cost the district a whopping $34 million to repay."
Only In California: School Owes $1 Billion On $100 Million 'PayDay' Loan | ZeroHedge

Too much money borrowed too stupidly.
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