factbat.com

Banks in today’s world fail because they are based on embezzlement and fraud. One only need research the history of banking and the profit mechanisms, or schemes, that have been incrementally implemented by those who became drunk on the power of other people’s money. It is just like the accountant who embezzles money, except that in high finance, this activity is called “fractional reserve banking.”

Furthermore, bank rescues by the government are much more common than most American’s realize, and have been occurring regularly for decades. The financial sector of America nearly imploded the entire economy in mid 1970s, but was rescued by tax payer money.

Nelson Rockefeller, allegedly one of the most wealthy and powerful people in America, is actually worth nothing in the great scheme of things and should well be living in poverty given his penchant for mismanaging, and losing, hundreds of billions of dollars of other people’s money. Rockefeller is the recipient of mountains of tax-payer bail-out money.

The Obama machine that has extended the current bail-outs, and which seeks to increase the deficit beyond this nation’s ability to repay it, is nothing short of embezzlers robbing every personal account in the nation, albeit in the form of tax dollars. This is why it is a guarantee that Obama will raise taxes. Actually, every administration raises taxes, they just find ways to present these increases as regulatory fees, penalties, lower tariffs on imports, Federal Reserve currency manipulation, and many others.

As for the Federal Reserve, it is merely the excusably incompetent rogue faction of the government who’s preposterously pragmatic members hide behind the smoke screen they are allowed to create. Barack Obama’s scape-goat, Ben Bernanke, was groomed by the administration for the main purpose of continuing the audacity of public embezzlement he learned from Geithner., Summers, Paulson, Volker and the likes.

Banks insist they are capable of continuous growth. However, there's actually no such thing absent a great deal of perversion, to an eventual cataclysm. The financial "fat-cats" - to quote the Messiah - in this nation could not possibly be blind to the many failures in the industry, or the fact that these failures are a direct result of the lack of ethics inured within the very concept of contemporary banking.

Continuous growth of anything within the known Universe always produces negative results such as embolisms, malignancies and deformities, and the incessant expectations of growth predictions by financial institutions is what is causing the cycles of boom and bust, or rise and crash, of the markets.

There must always be decay for the true cyclic ebb and flow of mankind to exist. The throttling of the society into terminal velocity is bankrupting the nation.

Currently, the growth model demands that financial firms hire, and offer incentives to, the most aggressive executives who can turn out the most loans - regardless of whether they will ever be repaid - and who are comfortable with mitigating the circumstances by evading the law. Much of this activity is created by a management atmosphere which insists that ethics and prudence are “old fashioned” and bad for business. Those who do not consign to this mentality are deemed incompetent and either relegated to the mail room, or simply terminated, thus there is a paltry amount of dissenting voices among the Wall Street mobsters.

These veritable sociopaths are who Wall Street bankers are speaking of when they tell Congress that the huge bonuses being paid to executives - with the tax-payer financed TARP fund - is necessary for complying with retention and incentive agreements made to the "talent". As well as the fact that this talent is privy to the duplicitous canards of the company and those who create the fraudulent balance sheets of the sector - including the laundry services all big banks offer to the CIA and drug cartels bringing in their huge cartons of tax free cash - and the industry is loathe to create more whistle-blowers angered by a bank who reneges on their incentives packages.

So how - one might ask - did all this racket become so prevalent in the industry? Albeit asked only by those who do not relegate the activity to indelible human nature purported by the notion that “the love of money is the root of all evil.”

Well, in the beginning, banks were merely repositories where clients paid a fee to store their valuables. Essentially banks began as nothing more than glorified warehouses.

The main valuable being deposited into the vaults of these repositories was gold, and was accepted into the bank according to its value by weight. Those making the deposit would then be issued notes which represented the weight of the gold. These were called “gold notes” and were issued for a nominal fee which was typically a percentage of the deposit in order to compensate the “bank” owner for his services.

These services were mostly reserved to securing and protecting the various clientele’s valuables, which provided a modest livelihood. In considering the fact that it requires only a basic amount of talent, education and effort to perform such duties, a modest living is all one could truly expect from such a profession. Moreover, there are many honorable people who would be perfectly satisfied with such a living.

However, as history proves, these servants of the business community were not satisfied with the fruits of their meager labors, and instead began to covet the wealth of the real men and women of prosperity, the business owners of America which, with their ingenuity and tenacity were able to proliferate in the market, and thus prosper enough to require such services.

One can easily imagine what it must have been like for those bankers to walk into the vaults each day and salivate over the stacks of gold and valuables they likely could never hope to create in their capacity as “watchdog to the stars.” And rather than pursue a more lucrative profession, they instead decided to seek circumvention of the laborious processes required to actually earn an affluent lifestyle, and began stealing it from those who had placed their trust in these economic mannequins.

While it is likely, and often quite obvious, that many a bank heist has been orchestrated by dissolute banking officials of varying status, this more overtly criminal behavior will be expounded upon in the next article.

What is imperative to fully identifying the many impetuous and contemptible activities of the banking industry lies in exposing the core concepts which were instrumental to the ensuing arena of finance so dependent on moral hazard and misfeasance in order to create profit out of thin air.

Initially bankers would resort to fraudulent tactics like manipulating their scales or placing the proverbial thumb on the tally. However, these methods were not without some extremely eviscerating risks. Back in those days, a regular client who discovered he had been getting cheated, could easily turn lethal. As well, this kind of “street justice” was often common and even preferred to the more lengthy process of litigation, because in those days people were much more difficult to track down or clearly identify if they decided to merely skip town.

Therefore, as bankers began to expect more pilfered gains with less risk - likely emboldened by jealousy and animosity - they sought to reform the banking industry through legislation that would allow them to float their worth on a ballooned balance sheet. Basically cooking the books openly because the government agreed to look the other way.

Regardless of what were the bribes, political arm twisting, incompetence, ignorance or just plain stupidity which eventually enabled the advent of “fractional reserve banking,” it is a scurrilously urbane method of indefensible thievery in most every way imaginable.

Fractional reserve banking actually allowed the underachievers of the society to embezzle the wealth of the nations most productive citizens and then gamble it in high stakes, high risk ventures that promised “get rich quick scheme” type profit margins.

Fractional reserve banking not only allowed sanctioned repositories to mismanage other people’s money for the purpose of gambling it, but it also allowed these bankers to borrow against it. And not from some reputable and liquid fund source, but from their own holdings.

This is where fiat currency began to be the tool of organized crime. Furthermore, this new paper, that was not backed by any assets, was added to the balance sheet which could again be fractionally held in reserve, thus producing a precarious two-tiered structure of self-imposed debt. This creates a business within the market that is in no way held to the rigors of competition and must be excessively regulated in order to prevent abuse.

The standard for fractional reserve banking only required that the bank hold 10 percent reserves. This means that for every $10,000 worth of actual assets - typically gold - the bank could claim to be liquid in the amount of $210,000. This worthless “derivative” is then invested and loaned as the bank see’s fit.

Although regulatory agencies many times attempted to monitor these transactions, it is impossible to prevent banks form lending to excessively risky clients. Risky clients such as, but not limited to, military dictators, drug cartels, national security agencies and foreign governments, have been the big banks’ bread and butter for centuries.

Unfortunately when these risky clients default on their agreements and the banks are threatened with the collapse they deserve - both as a result of mismanagement and betrayal of public trust - the government actually has the nerve to claim these banks are too big to fail, and bails them out of trouble with tax-payers picking up the tab…plus tip, of course, to compensate these politicians for the great service they are performing for everyone…right?…right?…no takers? Didn’t think so.

This gambling of the nation’s wealth and prosperity is engaged in every time a bank loan’s money, and the interest which accrues on these loans always reflects the risk assumed by the debtor. However, the only reason risk is the deciding factor is because there is no honor among the thieves who constructed this Ponzi scheme now strangling the entire economy. It is a Ponzi-scheme because with this type of system controlled by big central banks “in bed with the Fed“ citizens are simply borrowing their own money, and paying interest on it to an entity which truly has no actual merit, nor any viable reason to exist.

The entire banking system, including the Federal Reserve, needs to undergo a complete audit and rethink because it is no more operating in the people’s best interests than are the huge corporations.

These banks are unsustainable in almost every way, and that which the government now claims is “too big to fail” is actually “to criminal to exist.”