The Banks - what you need to know
It is easy to dismiss the financial revolution now underway, as nonsense or something which will be stopped by the government - the latter a friend loves to throw at me whenever we meet! Nobody can predict the future but I am sure that with Facebook now launching their own cryptocurrency next year, more of us will begin to accept that this new way is here to stay - no matter how hard the "system" tries to discredit it.
Which brings me to the banks! What is your experience with the bank? Positive? Disappointing? Frustrating? For the record my bank The Yorkshire have been excellent and if I had to recommend a bank I would certainly have no hesitation. I suspect the main reason they are good is because I owe the bank money so I guess they must look after me! I would never entrust savings to any bank.
Here is a view of the banking system, originally reported on a digital economy platform newsroom and certainly not in the Mail or the Mirror! It is a view I fully support and is backed up by the facts.
According to the World Bank, approximately 3.5 billion people live in poverty and have no savings of any kind.
The Human Rights Foundation estimates that 4 billion people live under authoritarian governments - and this does not include the UK!
Bank of America recently implemented a $12 per month fee on their low income customers who have less than a $1,500 balance. Fresh ideas from a bank to make poor people poorer.
There are many, many similar stories to report - like the increasing number of UK banks now charging for ATM withdrawals - assuming you can find a machine.
So why is our core banking system so unfair?
It originates from precious metal Guilds in the Middle Ages where gold deposits represented value already created in the economy. These Guilds developed the concept of issuing paper IOUs against deposited gold. As only a few required their gold back at any one time, the depositaries began to issue more and more paper IOUs for making loans against the gold. They held a "fraction" of the gold in case a merchant needed physical gold. These depositaries were our earliest banks, whose core model is based on the same fractional reserve concept.
Some believe this core banking system to be dishonest. What do you think?
1. The bank will tell you that the money you deposit belongs to you. In fact, legally, the money becomes the property of the bank. In law, you are an unsecured creditor to the bank; in return the bank gives you an IOU - or deposit account. The deposit is recorded as an asset on the bank's Balance Sheet and deposit accounts recorded as their liability to you.
2. The bank will tell you that "your" money is safe - in fact the bank holds only a fraction and lends the rest of it out. If you want more than this fraction of your money back, the bank takes it from elsewhere.
3. The bank tells us that our funds are "insured" by the Government, up to a certain amount. In fact, there is no government insurance fund that corresponds to these deposit accounts. It isn't insurance - it is a government undertaking that in the event of failure, the government will print more money to give to the banks so they can repay their liability to you. Quantitative easing by any chance..?
With me so far?
The banking system uses our deposits to make their own high returns, driven by the profits made by loans. In other words, the banks are lending our money but charging significantly higher rates than the paltry rate we get on our deposits. For the banks, this low risk, high reward strategy is key to profits - thereby assisting the 1% to get richer.
The banking system has completely failed the poor and those in developing countries.
The banks could pass on some of their gains to lift millions out of poverty.
They choose not to.
A New Banking Model
Imagine if we had access to the following:
- a system of money which existed before modern banking
- one which is both transparent and honest
- where no one can create money
- which is the polar opposite to fractional reserve banking
- which is global and impervious to authoritarian control
- where all users are owners
- which is available to the very poorest
- where our money is absolutely secure
- where there is no risk to devaluation without consent - like Venezuela
- without spending limitations
- and does not require a Bank...
This new banking model is now 10 years old. Surprised?
When I talk to people about this new model most express surprise; when I mention the name of the first new currency, most admit to having heard of it but believe it to be risky/a scam/ Ponzi - not to be trusted.
Their information comes from the "centralised" system, which includes the banks. If you were a bank or a part of the 1% owning 90% of the world's wealth, would you want change? Of course not! So, you set about feeding scare stories through the media, including social media, to put everybody off! Oldest trick in the book. In war time this is referred to as propaganda.
Please do not dismiss this new system - designed to benefit the 99%. If you hear or read negative commentary, check the source. Look for a conflict of interest - I guarantee you will find one! Then talk to us and learn the truth.