Posts Tagged ‘banking’

And That Is Banking

18 May 2017


…real banking, can all by itself, increase production.

– L. Ron Hubbard
HCO Policy Letter of 2 September 1982

The implication of the above reference is that poor banking practices can cause runaway price increases, while sound banking practices can increase the prosperity of all.

I wanted to write something about this subject because I have been studying about how home loans work, and it helped me realize some things that others have been pointing out for a long time.

Note that on 19 May I rewrote this post to try to make it more accurate; see more about that below.

Financial people tend to speak in terms that are not easily understood, and to assume you know about something that you don’t actually know about. However, most people have heard of the term “balancing the books” and this is a basic concept worth going over.

I suppose the idea that the books have to “stay in balance” is similar to the idea that “for every action, there is an equal and opposite reaction.” In the physical universe, this is true by observation. However, money and finance are conceptual universes, or you could say a kind of mathematical model of the physical universe. If a car exists, it is assumed that someone was paid to make it, whether that’s really what happened or not. So if I buy a car, I basically convert some of my cash into a vehicle. In my books (if I kept books), the price paid moves out of the Cash asset category and into the Vehicles asset category, and they stay balanced. What if someone gave me the car? I basically have to create a special category for gifts, which in a commercial business would be similar to something called “retained earnings”.


Now, say I’m a bank, and I have some deposits from my customers, and loan a portion of these to someone. This decreases my cash – the pool I make loans from. How do I replenish that pool (other than by getting more deposits)? In normal banking I would have to use part of my income (payments on loans I had already made to other people) and put that back into my cash. In mortgage banking I could do something called “selling the loan.” Basically, the loan turns into a security (essentially a document that can be bought and sold) that I can sell to a company that buys those types of securities.

Where do those companies get their money? They also create and sell securities – stock, basically – to investors. The investors include a lot of firms that help people save for retirement, as well as other investment firms. Those firms buy all sorts of stocks and other securities with that money.

The ultimate source of money for buying debt (making loans) in the U.S. is the Federal Reserve. The “Fed” is part of a network of “Central Banks.” Central Banks get charters from governments to control the money supply for them. They regulate banks, and they buy debt (or make loans, however you want to look at it). The Central Banks deal mostly with the large commercial banks, which are all international corporations. Smaller local institutions deal mostly with the big banks. The chain of purchasing debt works its way down until you get to the borrowers, who are expected to keep up their flow of payments. Governments are also large borrowers. To borrow money, they issue “bonds,” which come with a promise to pay dividends, and the full amount borrowed at the time of maturity. So in the case of government borrowing, the taxpayers, have to pay all that through their taxes. That’s why “bond initiatives” have to be approved by voters. In the end, a lot of what we make at our jobs goes to make profits for the owners of “debt.”

Making Money

Before my recent studies, I hadn’t really heard about this practice of “selling debt.” But debt is a receivable on the bank’s books, so it is worth something. It never occurred to me that you could somehow sell that to another company to get more cash (stay liquid, as the financial people call it). But this is really just another way of saying that the bank borrowed some cash. I’ve heard of companies borrowing to make payrolls, or buy new equipment. I’d just never heard of banks borrowing so they could make more loans. Of course, assuming they continue to service (collect payments) on the loans they sell, they have to forward most of those payments to the new owners of the loans, so that portion of their income is no longer available for lending.

As I wrote this, I came to see that “selling debt” could also be given another meaning. It could also be seen as selling people – governments in particular – on the idea that they should borrow money in order to do things. They shouldn’t save, they should borrow. You shouldn’t “wait until you can afford it,” you should buy it right now, do it right now. With governments, this is particularly pushed as a way to finance wars. Every major war I am aware of was financed with debt – the taxpayers (via the government) borrowed money from banks, then had to pay it all back afterwards. It is a potent way to “make money” in a short amount of time. I don’t know, however, if it really accomplishes anything over longer periods, especially if it involves making war.

Fractional Reserve Banking

Some people believe that this is a new idea. But it is really just a newer term for an old idea. According to Google’s Ngram viewer, the phrase first appeared in literature around the turn of the last century.
As long as banks have been loaning money, they have been using deposited funds (or other assets) to do so. The idea of “Central Banks” was pushed into place after it seemed that unregulated banks had an inclination to dig too deep into their cash. Now Central Banks police what fraction of a bank’s deposits (or cash, to use a simpler term) must be held in reserve so that their depositors will be happy with the illusion that their full deposited balance could be withdrawn at any time. Depositors get to account for their full deposited amounts as “cash,” when in reality only a fraction of that amount is actually available to be paid out from the bank’s reserves.

No one likes “reserves” because they just sit there and don’t do anything. It’s kind of like a having a Fire Department in your town. In a perfect world, they would never have a fire to fight, or even a cat to get out of a tree. In this real world, you need to have one because “stuff happens.” Same goes for reserves.

Some would argue that amounts held is reserve should be quite substantial. It gives stability to an economy, and breeds a certain level of confidence, even a certain willingness to take risks. I think there is validity to those arguments. But that does not mean banks need to keep 100% of their “on demand” cash deposits as reserves. This is discussed more below.

The beauty of a cashless system (in the eye of the banker)

In the “old days” money meant gold coins, or ingots of silver, or other precious metals, or gems. Today it can be reduced to a code in a bank’s database. Money (currency, really) had to be manufactured, transported and stored when not in use. Meanwhile, businessmen had grown used to account books, and moving larger sums around using bank drafts instead of currency. This began the move away from “hard” money. The “softer” the money, the easier it was to handle and move about. Banks and their major customers really liked these benefits. And so, national currencies were pushed into place, the use of paper money was greatly expanded, and finally computer systems were developed that just require an ID card to access account records.

Global-scale electronic funds transfer systems now exist, and are very widely used. All accounts at all modern banks are computerized. Banks are now relieved of the problem of having to store precious metals in their vaults, though “modern” money can still be stolen. To the extent that the world goes cashless, banks and stores are relieved of the problem of securing their on-hand currency, and only have to worry about their computers, which can be locked away in their now-empty vaults.

So, what’s so good about cash?

However, the credit or debit card holder now has to worry about the security of his electronic transactions. I once had a bank make a $2,500 error in my favor. They never bothered to correct it, though I told them about it more than once. For them it was insignificant, but that’s a huge amount for me. What if my account suddenly one day had $2,500 less in it? They better be able to correct that!

In a secure and honest world, using a card instead of cash (currency) would be a great way to go. In the world as it really exists, I want to be able to fall back on coins and paper money. If a store’s electronic payment system goes down, I want them to accept my cash. If I need some water out of an old-style vending machine, I need some coins or I go thirsty. If I want to tip a waiter, it’s easier for me to think with using a couple of extra bills.

When money is a commodity, then you can’t have some unless you earn it or physically steal it from somebody. When money is only a number in a database, what happens if I can’t get access to that database? And what happens if someone can get illegal access to it? Or in some other way fiddle with accounts just by making some entries in a computer program? It gives the tech-savvy an advantage I’m not sure they’ve earned. The cashless ideal includes a reliance on technology that is not necessarily as reliable as I need it to be. At the business level, if a transaction gets fouled up, it can be fixed later. At a personal level, it could mean the difference between staying fed or going hungry.

I’m not advocating a return to cash necessarily, though we might be forced into it should the electronic funds transfer systems stop working. But I am pointing out that our turn away from cash did not handle the most important problems we have always had: dishonesty, thievery and avoidance of real productive work.

Reality Check

My original concept of how this scam works was simple, but incorrect:

The bank has my $100. I thought this meant it could loan out $1000. That’s not exactly right. It is only allowed to loan, maybe, $90. Except, that loaned money is going to end up in another bank account, and then about $80 of that could be loaned back out. That whole cycle can be imagined to repeat maybe 5 or ten times. Now a lot more than my $100 has been loaned – deposited – and re-loaned. That’s what people call “creating money.” I discuss this more below.

The other part of my perception of what was wrong with this system was the cashless nature of modern transactions. This possibly provides more opportunity to “fiddle” the system. If you have to provide a borrower with real currency to complete a loan, then if you run out of currency, you can’t make any more loans. If you only have to credit an account on a computer, then you don’t need the currency. So, who’s to stop you from just pumping out loans? Your accountant, if he’s honest. Or a regulator, the next time you get audited. So the real point here is that the removal of hard currency from the system, reducing it all to numbers in databases, has a tendency to degrade the underlying concepts of what money is and represents. It should represent real value, real productive work. You should not be able to “fiddle” it into existence when you have done nothing to earn it.


I originally linked this trend towards a cashless system to the decline of interest rates, close to their total disappearance. I have a problem with interest because I don’t think most of the explanations for it are correct. It is often described as a payment to the lender based on the risk he takes by loaning money. But what about the risk the borrower takes in borrowing money? And what about loans between friends or relatives? I think the banks just decided to shift the paradigm because they had the power to do so. Look at interest rates on savings accounts, for instance. It used to be recognized that the depositor was actually making the bank a loan, and should earn interest on his unused balance. But depositors had no way to enforce that idea on bankers, so gradually interest payments on savings accounts have reduced to almost nothing.

The abandonment of the use of interest rates to control inflation in certain markets, and the subsequent increase in the supply of money in those markets, are bits of history not totally explained by the factors discussed above. Though the smaller banks that overextended themselves before the Great Depression could be blamed for what happened, I think that blame would be misplaced. They, however, felt the brunt of new banking regulations, while at the same time, what was to become a huge boom in the mortgage markets can be traced back to those times. I think there remains an untold story (at least it hasn’t been told to me) about how that all came about and about what is unfolding today. My concern is that we will strike out at the wrong targets (called misidentifying root cause where I work) and simply prolong our agony as a result. Benefiting from the suffering of others has never been an honorable way to gain status in a society. Yet suffering continues while a few grow unbelievably rich. Until we begin to apply more effective solutions to problems of finance, the economy, and politics, we will continue on our slide towards a non-sustainable system that will eventually totally break down.


I relied heavily on an article written my Kenneth Ballard here:
to get an explanation of how banks account for the loans they make.
I don’t know much about this guy, but he seems to know what he’s talking about…I wish the subject were easier to understand. I have had a terrible time trying to do so…
Wow! Mr. Ballard has responded with corrections here:

Follow-up notes for those interested

According to the Federal Reserve’s own website:
“Reserve requirements are the amount of funds that a depository institution must hold in reserve against specified deposit liabilities. … Depository institutions must hold reserves in the form of vault cash or deposits with Federal Reserve Banks.”

Notice that this says nothing about loaning money. The “reserve requirement” is a fraction of total monies on deposit. So, that means the rest of the monies on deposit are available to loan out. I think the first stumbling block here is the term “deposit liabilities.” Who, who isn’t accounting trained, knows what this really refers to? It’s like two conflicting ideas in the same term. This goes back to the fact that there are two balancing sides to every transaction. When a bank receives money from a depositor, it’s not a gift, but on the other hand, the depositor gets nothing in return, except a receipt. As the reference I cited at the beginning states, in the “old days” that receipt acted as money. Nowadays, the fact that a person has money “on account” gives them the right – or ability – to buy things with it.

The depositor counts his bank balance as cash – as a liquid asset. He can do this because there is an implied promise (perhaps written somewhere) that the bank will pay him back “on demand.” More realistically, the depositor has loaned the bank some money for its use. But there is no formal loan contract, as would be the case if the depositor had purchased a CD or a bond. So the depositor is encouraged to not think of his deposits as “on loan” to the bank. However, that is closer to the actual situation. I think this difference between perception and reality is what some people object to. Yet, if the banks do a good job, no one will ever know the difference.

It could be argued that banks should be more honest about what they are doing. It would probably better reflect how they actually operate if they sold bonds or CDs to anyone who wanted to maintain a significant balance with them. Or to make them a “member” like the Credit Unions do.

Private individuals are never going to fully realize that a portion of their deposited funds is being loaned to others unless the way their account at the bank works actually makes that clear. In the past it has been a workable system in spite of this. But since interest rates collapsed, more and more people are questioning it. The “multiplier effect” would still work, but perhaps the banks should be made more responsible for both the positive and negative aspects of it. Having to “insure” bank accounts is not something that should be necessary. If the banking system were more honest with the public about how it actually operates, I think the public would support it – especially if it resulted in real economic growth at the local level. Right now something is suppressing that growth. Questionable ethics levels in the banking community does not help matters any. The banking system has a lot of power to do good in society. Or harm. It is not currently demonstrating the good side of that power.

Sorting Out Society

2 April 2017

The “Thinking Out Loud” category is for hypotheses, ideas, opinions. Though of course these are always influenced, or colored, by prior training and study, I put a post here when I am unsure of the facts, or don’t care to be academically rigorous.

block man pencil sketch

Sketch I made for art class, about 1970. I picked it to symbolize the effects that “bad things” have on life and the individual.

A problem of money

What got me going on this line of thinking was a difficulty I was having obtaining funding for a project. I thought to myself: Someone doesn’t want to spend this money; they want to sit on it instead. And that lead me to the subject of banking.


Banking, it is said, started when tradesmen (this is the story I heard) wanted someplace to store their gold securely. The “banker” stepped forward, offering to provide this service. In exchange, he would be allowed to loan out the money to others, and collect interest payments on these loans. Interestingly, according to Wikipedia, originally the most secure places for such deposits were temples and palaces. But we won’t go down that road just yet.

Here we have a situation where a professional-level service is invented to fulfill a need. The service consists basically of amassing deposits (and safekeeping them) which one can then earn money on. It is presumed the need arose due to 1) lack of space at home to store such items, or 2) fear for the security of the assets.

Today, money exists as figures in accounting books. And those books are actually stored on computers. There is no longer any great need to provide security for currency. All one must do is secure the computers.

Traditional banking still exists, but cash deposits bring back virtually no earnings to the depositor. Investment banking, on the other hand, has skyrocketed. The whole society has been pushed into making investments and buying on credit. Why? Keeping deposits safe doesn’t make money, especially when they are only numbers in a computer. Traditional banking can still pay off, but there is much more to be made managing investment portfolios and offering short-term credit at very high interest rates. This work relies on the existence of asset pools, and managers of these pools are often rewarded according to the size their pool. Even if you could sell some assets to buy, say, land (which works under a different system), the modern banker would prefer to loan you the money to buy the land, with your assets as collateral. It would be simpler for the land buyer to just sell one asset in order to buy the other, but is not in the interest of the bankers to operate that way.

Back to Basics

The original need for banking, then, arose – we are to suppose – from an uncertainty concerning the security of real assets (gold). Why would anyone have this uncertainty? Because people existed who were willing and able to steal such things from other people who had acquired them more-or-less honestly. Those people are commonly called “criminals.” They have always been a major nuisance in any society. They are willing to break the most basic rules, or morals, in a society. Why? That is a question to be answered elsewhere. It HAS been answered, but for the purposes of this discussion, it is irrelevant.

Let’s say you had a criminal of somewhat unusual intelligence. What might he be attracted to do, say, in the banking scenario above? One thing he could do would to become a banker. Then he could hire some hoodlums (criminals of leser intelligence, we might imagine) to go around town and steal precious things from people’s houses. He would then advertise his services, noting the recent increase in the crime rate. He would have to keep his connection to the hoodlums a closely-guarded secret. And in such a wise, he would attract more business to his bank.

Application of the criminal modus operandi (MO) to other fields

Mishaps, crime, sickness, hunger, disputes and war are some of the big problems that society must deal with. Smart criminals could secretly cause such things to happen, then offer services to “protect” people from the bad effects of these things. In modern times, criminals have even been accused of causing bad weather, floods, earthquakes, and ecological collapse. For them it would seem like “good business,” would it not?

What professions these days offer such services?

  • Lawyers
  • Doctors
  • Insurance Brokers
  • Psychiatry and Psychology
  • The military and arms manufacturers
  • Police
  • Governments
  • Educators
  • Preachers

All of the above fields are subject to pressure from the criminal world and can turn criminal. In other words, they offer services based on the fear that something bad will happen. Most people, though, would not be interested in causing such bad things to happen. Only the criminals would.

The real essentials

All an honest society of human (or similar) beings would need to survive – even prosper – would be the following:

  • Food (and water)
  • Shelter (housing and community buildings)
  • Clothing sufficient for seasonal weather variations
  • Transport
  • Systems for handling waste
  • Means of communication
  • Quiet times
  • Opportunities to play
  • Opportunities for spiritual growth

How, then, did we get governments, lawyers, war, insurance companies and psychiatry? It traces back to the criminal and his origins.

Recent discoveries support these observations

Hubbard was the first researcher I studied who really laid out the basics for me. But others before and more commonly after him have reiterated those basic findings.

The human personality is immortal and capable of remembering anything it has ever experienced. Thus, a simple process of sharing experience could ultimately replace education as we now know it. It could also replace all the self-important “research institutions” that seem to look and look but never find the answers. Of course, this ability to remember must be unlocked. That’s where spiritual development comes in. And who was pushing the inability to remember? Criminals, of course. You wouldn’t want someone getting murdered, then coming back, going to the police, and telling them exactly how it happened and who did it. (Variations on this have actually occurred.)

Hubbard adds that the being is capable of knowing anything that can be experienced. On an esoteric level, this indicates that anything is possible. On a more practical level, it means that the plagues of man caused by criminals or otherwise could in theory all be dealt with at the spiritual level. This even includes healing of the body.

People are basically good. They are willing to play the game of human life and cooperate in doing so. All the basic requirements of the game could be provided based on this willingness alone. There is no real evidence that any of the professions listed above are in fact indispensable. There is only evidence that in a world where criminals go undetected and unexposed, these extra functions become apparently necessary.

Huge numbers of people on Earth and elsewhere live out their lives doing nothing but the essentials, as listed above. Some never experience any major criminal activity. Others do and bounce back. Some less fortunate get sucked into the criminal system of die at the hands of criminals. These could be as much as 1/4 or more of the population of this planet. That’s too many. With better understanding of and control over the criminal, most of those adversely affected could be returned to happiness.

Happiness, you could say, is the overcoming of not unknowable obstacles toward a known goal.
– LRH, 1954

Institutionalized Crime: Banking

4 July 2016

Member of animal superorder Selachii.

In Part 28 Jonnie Tyler finally finds out who the “small gray man” is. He is a banker, portrayed by LRH as a member of the alien race called the Selachee.

The planet Psychlo, as Jonnie has just learned on his own by sending fancy video cameras out into space using the transshipment platform, was blown up a little over a year ago when Jonnie managed to secretly send a load of bomb-filled coffins there. The huge nuclear bombs blew down into Psychlo, held in on top by a tremendously strong protection shield. The explosions reached its molten core and eventually turned the whole planet into a small star.

Psychlo was the home planet of Intergalactic Mining, which had taken out a loan from their bank about a thousand years earlier to purchase Earth from the government. The Psychlo Empire had discovered the planet after finding a map of its location on a space probe launched from Earth. According to the bank, Psychlo had “legal title” to the planet, which had been transferred to Intergalactic at the time of the sale. The mortgage had a payoff period of over 2,000 years. The company had stopped payments on the mortgage a year ago, when Johnny had succeeded – unknowingly – to destroy its home planet.

The bank was looking for the new legal holder of the title so it could serve loan delinquency papers on them.

Does this sound ridiculous? It happens every day on Earth, on a much smaller scale.

Of course, at the level of a planet, it is ridiculous. Not because of the concept of “legal title” but because of how the law favors appropriation of lands (or planets, or space) by force, with no further responsibilities or liabilities attached. This is law written by the conqueror and is unjust on the face of it. Yet we deal with such laws every day.

Did the native inhabitants of any lands on Earth have any say in the “laws” that governed the disposition of those lands when Europeans overran them by force? Of course not. They were required to learn European law to retain any control at all over any piece of their former territories. From a more humanitarian viewpoint – or even from the viewpoint of “natural law” – what occurred when Europe overran the Americas was theft, plain and simple. In all of the Americas, there is very little if any “legal title” that can be traced back to a real, human, transaction between friendly parties.

But banks set up a legal system that would favor their interests. And I can only imagine that they used various forms of blackmail and propaganda, as needed, to bring pressure on the writers of those laws.

I haven’t finished re-reading (listening to) the book yet, and I don’t remember how Jonnie solves this problem.

There are obvious basic principles of respect and responsibility that could be applied in such situations. The first and most obvious is that an inhabited planet should not be considered “fair game.” If it can be demonstrated that any individual, group, or society is occupying and taking care of an area of space, that gives them “title” to that area. For many reasons, use of land – or space – cannot be governed by quite the same rules that cover personal property such as clothing, furniture, tools. Yet the bankers have distorted law in that direction, while overlooking certain obvious contradictions.

The result in many places is that land can be bought and sold as if it were private property, while if stolen by certain protected parties, will be considered as belonging to them regardless of the act of theft.

I you want to wreck your shirt and buy a new one every week, that’s your choice. But you can’t treat land – or planets – that way. A conqueror that kills a planet or its inhabitants, or sells them into slavery, has no right to legal title and incurs a debt to the inhabitants or their survivors. That our laws should protect such a conqueror is only institutionalized crime.

My study of this subject has only taken me as far as Henry George’s book Progress and Poverty. I found his basic ideas very persuasive, and I recommend the book. Law, however, can always be broken and re-written by force. This is an irreducible fact of life. So, to go far, one must speak softly, but carry a very big stick.

A very short history of coups d’état in the U.S.

6 October 2013

It is time for me to put in my 2 cents on this matter, as the political scene continues to be quite extreme.

It is common in history to think of political coups as being accomplished by killing (assassinating) the existing government leader.

For some reason, this line of reasoning is not followed in the United States. All assassins were lone nuts or extremists, not associated with any political opposition group. This seems to me to be highly silly.

In this, I follow the analysis of Bill Still in his 2010 documentary “The Secret of OZ.” Many other researchers in this line have come to the same conclusions, and include the Kennedy assassination in the same group as the others. The attempted assassination of Andrew Jackson in 1835 is also usually included in this list, as it was overtly political. The only presidential assassination which does not fit this pattern was the William McKinley shooting, but it definitely is part of this subject.

Four Presidents killed; one political issue.

The attempt on Jackson’s life was made on 30 Jan 1835.

Lincoln was taken out on 14 April 1865.

Garfield was wounded on 2 July 1881 and died of complications about a week later.

William McKinley was shot by an anarchist on 6 Sept 1901 and died a week later.

Teddy Roosevelt was wounded by a man who claimed to be avenging the death of McKinley on 14 Oct 1912.

And Kennedy was taken down on 22 Nov 1963.

What is the issue that ties all these deaths and attempts together?

Who controls the money supply?

It can be established that public (government) control of the money supply can lead to a prosperous economy that grows stably.

Still’s film cites Roman coinage, English tally sticks, and Colonial Scrip as examples of government-issued money that fostered economic growth and general prosperity.

The Founding Fathers were aware of the usefulness of Colonial Scrip, and started the Revolution majorly on demands from England that all debts be paid in gold, which was scarce in the colonies.

During the conflict, the colonies printed “Continentals,” a paper money, to get by during the war. This was undermined by massive English counterfeiting. When time came to write the Constitution, the rampant inflation caused by the counterfeit Continentals was still on everyone’s mind, and the Constitution only allowed the federal government to mint coins, not print paper money.

From that time until today, a largely unpublicized political battle has raged over what body would be allowed to issue paper money in the U.S.

Timeline of the Money Wars

The early Congress was persuaded to create a private bank in 1782 to issue paper money. This bank, the Bank of North America, inflated the money supply, so Congress killed it in 1785.

The next privately-owned bank allowed to issue money was chartered for 20 years in 1791. Thomas Jefferson (among others) didn’t like the idea. As time went on, it become more and more clear that it was a bad idea. After Congress refused to renew the charter in 1811, the British attacked Washington D.C. in 1812.

This pressure eventually resulted in a new private central bank being chartered for 20 years in 1816. During this period, Congress came under the thumb of private banking interests, and renewed the bank’s charter in 1836. However, Andrew Jackson vetoed the renewal.

So the bankers secretly declared war on the American people. When they could not get a new private central bank, they started the Civil War, hoping to divide the new nation and thus defeat its will to be financially independent. Lincoln printed “greenbacks” during the war, and intended to continue this practice. When it was clear the war would not divide the country, Lincoln was taken out in the spring of 1865.

After this, Congress, still firmly in the pockets of the banking interests, was persuaded to reduce the money supply in the United States, causing a depression. The Coinage Act of 1873 was passed to take silver coins out of circulation. In response to this suppression, a “greenbacker” movement was born, and also a “free silver” movement. Garfield supported these causes.

He was taken out on 2 July 1881 after being in office only a few months.

European banks continued the pressure by again demanding payment in gold, as England had done prior to the revolution. This resulted in a “panic” in 1893, and massive loss of wealth by small banks and farmers.

In 1896, William Jennings Bryan ran on an anti-banker platform. The bankers defeated him with a rumor-mongering campaign. This allowed them to pass the Gold Standard Act of 1900.

But the populace was still anti-banker and supported Teddy Roosevelt. He was shot in October of 1912 but survived.

However, Woodrow Wilson was pushed into signing the Federal Reserve Act of 1913, and we still have that system today. (The Federal Reserve is a private bank that issues all paper money in the United States.)

It is believed that Kennedy had plans to change this system. Since he was taken out, no President has seriously talked about it, though it is obvious to the public that the banking sector remains largely corrupt.

Coup D’état: Accomplished

For all intents and purposes, the banking interests won in the United States in 1913. They consolidated their power with the Kennedy assassination in 1963.

There has been much written and said about who these people really are, where they come from, what they want, and to what extent their power reaches. I just call them “criminals.” That’s basically all they are. They want to get rich without working, because they can’t work, they can’t invent, they can’t dream of anything bright or beautiful. They are locked in cages of their own designing; they have no business running a nation or a bank. The sooner we learn to handle them, the better our futures will be.

My take on the push against Sharia in the US

9 May 2012

Those who follow me (if any) know that I am interested in changing the current financial system. In this regard, I have been following the White Hats movement, which seems loosely related to the much more tentatively real Galactic Federation of Light.

These people want to replace the current system with one that is “equity-based.”

On googling “equity based finance” I found numerous links to articles and papers about Islamic banking. Why was this?

It is because Sharia advises in favor of equity-based financial practices.

I read the Wikipedia article on it here:
Islamic Banking

To quote the article briefly:

The term “Islamic banking” refers to a system of banking or banking activity that is consistent with Islamic law (Shariah) principles and guided by Islamic economics. In particular, Islamic law prohibits usury, the collection and payment of interest, also commonly called riba in Islamic discourse. In addition, Islamic law prohibits investing in businesses that are considered unlawful, or haraam (such as businesses that sell alcohol or pork, or businesses that produce media such as gossip columns or pornography, which are contrary to Islamic values). Furthermore the Shariah prohibits what is called “Maysir” and “Gharar”. Maysir is involved in contracts where the ownership of a good depends on the occurrence of a predetermined, uncertain event in the future whereas Gharar describes speculative transactions. Both concepts involve excessive risk and are supposed to foster uncertainty and fraudulent behavior. Therefore the use of all conventional derivative instruments is impossible in Islamic banking.

The source given for this statement is:
Mervyn K. Lewis, Latifa M. Algaoud: Islamic Banking Cheltenham, 2001

Morality in finance

This introduces the odd idea that banking, and financial matters in general, should be conducted on an ethical, even moral, basis.

The is NOT the Western tradition! To be curt, the West has practiced “rape and pillage” banking since at least the days of Rome.

Push against Sharia in US

There has been a push against Sharia in the US justified by the idea that Sharia encourages Islamic extremism (for which there is no proof, of course).

According to this article support for this backlash seems to be loosing ground. But where did it come from? The article mentions David Yurushalmi, a lawyer for the conservative Center for Security Policy (CSP). David, an anti-globalist, does not claim to be the intellectual or any other leader of this movement. However, he does firmly believe in it, as does the Center he works for.

This group honors mostly various military leaders in the US. One odd exception to this was Christopher Cox, U.S. Congressman from California, and chairman of the Securities and Exchange Commission from 2006 to 2008. This group also supports Zionism and American Exceptionalism.

According to Wikipedia, its membership includes Richard Hoagland and Linda Moulten Howe, who are prominent commentators in the alternative news community.

Again according to Wikipeida, based on a web page that no longer exists, the CSP is subsidized by donors supportive of neo-conservative causes, including the Sarah Mellon Scaife Foundation, the Shelby Cullom Davis Foundation and the William H. Donner Foundation.

I have no real way of tracing the sources of funding for these foundations. However, the Mellons were a banking and oil family. Shelby Collum Davis was an investment banker. And Donner was a steel man who got financial support from Mellon.

These guys like the “American way” there’s no doubt about that. And that includes, I presume, the “American” way (actually the Roman/Italian way) of doing banking. Many “modern” banking practices are outlawed by Sharia.

Any connection?

It’s a lot more clean and clear than the surface argument, isn’t it?