Why do we allow to poor to be impoverished?

A fool and his money are soon parted but these days most of us seem to be fools and there are easy and apparently legal ways to part fools from their money. The scams that seem to succeed best are those that concentrate on taking a small sliver of cash from hundred and thousands of people, rather than the big coup that parts a single person from millions. Continue reading

Who Controls Our Money?

About two hundred and ten years ago, Mayer Amschel Bauer-Rothschild, the father of the Rothschild banking dynasty said “give me control of a nation’s money and I care not who makes her laws”. His words explained the relationship between bankers and the state. That held true of the power vested in banks in 1800 and still holds true today in most nations.

But today in the United Kingdom governments are going to make laws about banks and banking. Will the banks be able to resist the laws or has their power waned? Banks are powerful creatures and their wealth and control of credit makes it hard for any government to act contrary to what the banks deem in their best interest. Banks place their own interests ahead of the national interest, like true multinational companies.

But in the United Kingdom virtually everyone, outside the banks, knows that the banks are in need of reform.

After a long and hard look at British banking, the Independent Banking Commission has reported on the measures it recommends that will help avoid the kind of debacle that banking has undergone in the past three years. No reform can be a substitute for honest, wise and prudent leadership, but the Commission’s recommendations, while not being able into insert integrity and caution into banks and their leadership will, when implemented, make things much less likely for banks to need taxpayers’ money to avoid going bankrupt.

Had normal laws and procedures been followed several years ago, at least three, and possibly four of the major U K banks would have going into bankruptcy, because they could not pay their debts as those debts fell due. Those banks would have suffered the fate of thousands of businesses and had the ignominy of being would up, their assets (such as they were) seized, and their directors disqualified from holding directorships for fifteen years.

Had Slippery Syd the Master Con Man conceived of such a delicate effective fraud as personal protection insurance he would have had is collar felt rather sharpish, but banks are immune from normal laws, and they will pay back some of the PPI money they conned but no one will stand in jeopardy of losing his or her liberty.
It is all part of the condition of British banking; insolvent crooked and treating depositors as a trough at which the banking executives directors and speculators may gorge.

Of course the banks were to blame for the state they were in, with a good helping of contributory negligence from the government of the day and previous governments which allowed the banks a free hand with our savings and assets. Fortunately for the banks, they were deemed by the government as being too big to fail, and so they were rescued with billions of support from taxpayers which they obtained at bargain basement rates while saddling the taxpayers of the future with debts and liabilities that will take many years of growth or inflation to erode. Some banks were taken into virtual public ownership.

That means we have the likes of the Royal Bank of Scotland, HBOS  and Lloyds TSB examining the affairs of their customers to ascertain whether the customer is credit worthy and whether the facilities should be continued.

For some reason the executives who did the most to contribute to these failures – the directors and traders of the big bonus culture – were let off the hook and allowed to retain their ill gotten gains and pensions, notwithstanding the damage they caused. We can speculate about the reasons but I see no sign of the likes of Fred Goodwin hanging his head in shame.

The reforms that have been recommended by the Commission are structural; banks that take deposits should have their assets and liabilities under separate corporate and management control, well away from any speculative “investment” they may wish to undertake in order to swell the bonuses of their speculators. The bank will not be able to use the widows and orphans funds as part of their leveraged speculation operations in future, probably around 2019.

The other major change is that banks must have a buffer of 10% of their domestic retail assets, rather than the present wafer thin requirements that exist or the 7% recommended by the International Committee on Banking Supervision. The biggest banks would have to keep back more than 10% in reserve.

There are other proposals which will create more competition and make it easier for customers.

Of course, the banks will object to these changes, and we will have to find out who rulesBritain; the banks or the government. I would add to Mr Bauer-Rothschild’s words of wisdom; the control of a nation’s money is only vested in a bank if the bank has lent money to that nation. In the United Kingdom the taxpayers have lent money to the banks and so the banks will have to care very about who makes the laws that the United Kingdom.

The Personal Protection Insurance Racket

There is a line between criminality and legal behaviour and nowhere in the whole field of law is the line blurred and indistinct that it is in the field of fraud. If a burglar breaks into your home and robs you, once the burglar is caught we expect the burglar to be prosecuted and punished. If a bank sells you a product that you do not need and have no use for and it is an insurance product on which you will never be able to claim, you might expect the bank to be prosecuted for fraud and punished. Continue reading

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