"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."
- Thomas Jefferson (Attributed)
3rd president of US (1743 - 1826)
Who “makes” money and who earns it?
When someone says they made money they are usually referring to the process of exchanging labor for pay, or working. This can be applied to any aspect of a capitalist enterprise regardless of whether the income is from direct labor or transactions that result in a profit. In this scenario, an investment and the labor associated with the enterprise constitutes earning. In either case, goods or services are exchanged, the backbone of capitalism.
However, when bankers “make money” they are actually referring to the act of printing it and then lending it. There is no actual earning going on because without the supply of money, they are only lenders of the funds they collect from investors or depositors.
They ability to actually make money, that is to print it and assign value to it, is strictly the domain of the banks, particularly the Federal Reserve who supplies the “new” money that circulates through the system. Money is the fuel of the entire system and must be kept circulating for the desired result which is growth. We know that when people stop exchanging, stop buying things, the economy slows and the lack of growth results in stagnation and recession. The same thing happens when the credit markets freeze up, the lack of spendable money constricted and therefore growth slows or stops completely.
The manifesto below is attributed to the bankers who have always known that controlling the money supply is the same thing as controlling the economy (and thusly the population and the levers of power reserved for the political entities that wield the authority of the governed). Banks then, are nothing more than the starting point for a series of events that result in a consumer-based economy.
It also means that they have the ability to establish valuations, the appraised value of a home for instance, the foundation of all the lending, borrowing and investing that occurs once that value is established. When the valuations are inflated we see “bubbles” which inevitably burst once the market independently decides the actual valuation. In other words,, if there is no one to buy your million-dollar mansion, it is no longer worth a million dollars.
This is what occurred in 2008, the residual effects continuing to plague the economy today. The difference in the original. inflated value of a residential property and its actual (current) value creates a gap that must somehow be closed before market forces displace artificial valuations. Until the bubble bursts, there is a lot of money to be “made” buying and selling properties especially when buyers are fooled into thinking that the artificial valuations will continue to rise, the only protection against default if they don't. A house of cards is constructed, and since the entire economy is based on these valuations, at some point capitalization becomes strictly an interpretation of market forces and this cycle repeats itself as it has since the beginning of lending for profit.
While it lasted, there was a lot of money to be made, and a lot of commissions were paid out to the people that packaged the loans and often resold them to unwitting investors who accepted the false valuations when they invested in real estate or mortgage backed securities. The entire economy became anchored to these valuations and when it became obvious they were inflated, the entire economy had to compensate for those “investments” causing hysteria and dramatic sell-offs in the stock market, the collapse of the credit market and the inevitable foreclosures that follow.
The banks don't really care about all of this because they know that whatever happens they will either profit from rising valuations or be compensated for their losses when their debts become “toxic” eliminating anything resembling risk. The economic devastation caused, the actual suffering that occurs when 46 million people are thrown into poverty is of little consequence. The only repercussions are political and so they know that the public relations battle, the imperative of ignorance, the lack of knowledge by those who are fleeced, are key to maintaining their stranglehold on the economy and all of its population.
The Occupation Movement therefor, is antithetical to their business model which has enslaved not only those who carry the burden, but on all future generations that will be obligated to pay off their losses,which are now included in the national debt. From their point of view, the protests that draw attention to all of this are the only thing they fear. The banks have always relied on the ignorance of the population to accomplish their objectives for very good reasons.
THE BANKERS MANIFESTO
Congressman Charles A. Lindbergh, Sr. revealed the Bankers Manifesto of 1892 to the U.S. Congress somewhere between 1907 and 1917. The source was an article written by Louis Even and published in United States Bankers Magazine 1892.
“We (the bankers) must proceed with caution and guard every move made, for the lower order of people are already showing signs of restless commotion. Prudence will therefore show a policy of apparently yielding to the popular will until our plans are so far consummated that we can declare our designs without fear of any organized resistance.
“Organizations in the United States should be carefully watched by our trusted men, and we must take immediate steps to control these organizations in our interest or disrupt them.
“At the coming Omaha convention to be held July 4, 1892, our men must attend and direct its movement or else there will be set on foot such antagonism to our designs as may require force to overcome.
“This at the present time would be premature. We are not yet ready for such a crisis. Capital must protect itself in every possible manner through combination (conspiracy) and legislation.
“The courts must be called to our aid, debts must be collected, bonds and mortgages foreclosed as rapidly as possible.
“When, through the process of law, the common people have lost their homes, they will be more tractable and easily governed through the influence of the strong arm of the government applied to a central power of imperial wealth under the control of the leading financiers.
“People without homes will not quarrel with their leaders. History repeats itself in regular cycles. This truth is well known among our principal men who are engaged in forming an imperialism of the world. While they are doing this, the people must be kept in a state of political antagonism.
“The question of tariff reform must be urged through the organization known as the Democratic Party, and the question of protection with the reciprocity must be forced to view through the Republican Party.
“By thus dividing voters, we can get them to expend their energies in fighting over questions of no importance to us, except as teachers to the common herd. Thus, by discrete actions, we can secure all that has been so generously planned and successfully accomplished.”
Woodrow Wilson sees the light:
“I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is now controlled by its system of credit.We are no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men.” -- Woodrow Wilson 1919
“Glass-Steagall also included a ban on bank holding companies from owning other financial institutions, which was seen as a major contributing factor to the reckless speculation which precipitated the crash (of 1929).”
On the Federal Reserve: Sounds familiar?
“The Federal Reserve System is designed to suck the real wealth out of the nation and put it in the pockets of the bankers, and now that they have succeeded, the system is breaking down, too cash-poor to operate efficiently, just as it did in the colonies in the early 1770s under the Bank of England. The system is broken because the bankers have all the wealth, and absent a new source of wealth to pay the bankers’ interest charges and fees, the system is locking up.”
Video on Essence of Banking: Slaves to Debt
“Remember that from an investor's point of view, the value of a home is not the home itself, but the debt the home creates and shackled the homeowner to, worth many times the cost of the actual house! That debt, which is pure profit, is sold to Americans as the 'American Dream'; to work 30 years to pay the bankers many times what the house actually cost!”
In other words, the typical mortgage using the example provided of a loan amount of $100,000 at 8% compounded interest will result in a return of $264,153.60. This debt is what the banks desire, not so much the collateral which is subject to fluctuations. The objective becomes to re-establish ownership during these crisis phases, called foreclosure, and then re-lend money to another buyer at a higher price. The home becomes a trap for those who cannot honor the terms of the original agreement based on false valuation, and a vehicle to incur even more debt as the home is essentially forced into a series of new transactions, all of them profitable endeavors for the banks who never actually relinquish control or ownership of the property.
Cash buyers are not the norm and usually based on speculation. So the American Dream is actually nothing more than a device to shackle the buyer to a series of payments over thirty years, forcing them into a constant state of indebtedness. The payoff, the actual transfer of ownership, subject to any number of variables (unemployment, valuations, illness or death, default and any number of other possibilities that may prevent the actual transfer of the property to the buyer before the debt is paid).
So after a typical devaluation that results in a massive wave of foreclosures, we find aggressive efforts by the banks to regain complete control of the collateral:
“In thousands of cases, employees falsely swore that they’d personally examined each homeowner’s file. They also routinely submitted false documents in support of their claims to foreclose on homes.”
We have learned about “robo-signing” which is a way to rush these foreclosures through the courts while making sure the mortgage holder cannot refinance the loan. People are not as dumb as the banks would like. They are learning about how these scams operate and who pays for them. The reaction manifests itself in demonstrations of this dissatisfaction so we are witnessing the natural progression of knowledge when we see people lining up to close their accounts:
ALEC business model:
“These 'model' bills form the basis of hundreds of pieces of legislation each year, and they often end up as laws.”
“I am not saying that liberals adopt the 'my way or the highway' agenda. I am saying that Occupy Wall Street protesters should pack their bags, declare victory, and prepare some tough questions for any political candidate that undermines their goals.”
- Rick Perry joins OWS? Stop the presses!
"The Wall Street bailout was the single greatest act of thievery in American history," Perry told a crowd of about 50 in Elkader. 'And Newt Gingrich and Mitt Romney were for it. That's what insiders do.'
“The accusation is a new addition to Perry's typical populist pitch, which ties 'Wall Street financiers' and 'Washington insiders' together as profiteers of the financial crisis who deliberately gamed the system and 'bet against' the nation's middle class.
"'On Wall Street some people got rich. I mean literally insanely rich. And they were betting against millions of homeowners with these subprime mortgages,' he said Monday.”