Bank Bailouts, Real Estate Douche Bags and Stupid Consumers

The "Credit Crunch" and World financial crisis is on everyone's mind of late. I found an interesting article this morning which related to banks and their origin as small time hoodlums. It points out that Banks started out as Artisans with vaults storing gold for people then lending out little pieces of paper as promissory notes so people could buy shit. Basically the creation of a "Cash" system over a Gold based system.

Since that time, the creation of these pieces of paper has been taken over by federal mints. As a guess, to thwart the scammers and create a stable financial system. Of course, this was soon circumvented by the creation of Credit Cards. The Banks now had ultimate control. Add this to the low interest introductory rates and the big banks (of which CITIBANK is one of the biggest culprits) had world consumers by the short and curlies.

But wait, are the Banks solely responsible for this credit crisis? Ya they were the ones with those low interest loans, no money down mortgages and various other money lending tools, however they cannot hold all the blame.

This is not the first time this has happened, back in the 80's a similar crunch happened with Balloon payments, housing market crash and money devaluation followed by a rapid increase in lending rates. It is no secret this was bound to happen again. So who is responsible.

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We went through the Bank role in this,now how about the Real Estate Agents. This particular level of Douche bag who are supposed to be educated in the ways of the housing market kept telling home buyers"Oh you must buy now the prices are going "up up up!" Of course this was true, only because these wolves in cheap suits were feeding the frenzy.

Combine that with the Bankers and their low interest rates and no money down mortgages and all of a sudden, the stupid people were getting into the housing market.

By way of a wicked segue, that brings us to the consumers. This particular level of idiot believed everything they were told. And why not, it wasn't like a recession ever happened in the past (Sarcasm). They believed this was different, they wanted to live in the lap of luxury, they wanted all the toys without actually paying for them up front, THEY WANTED INSTANT GRATIFICATION. This all comes down to CONSUMER STUPIDITY.

For the past couple of years, my favorite catch phrase among friends when they asked me how my business was doing (Great by the way) was "Consumer Stupidity is at an all time high." It was easy to sell almost anything, consumers wanted and demanded the best. They didn't care about the cost, after all their "friends" at the credit card companies and banks were there to take care of them.

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Anyways, here is the article which sparked all of this. I found HERE
it is definitely an interesting read.
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Where did banks come from?

Here's a really short answer in one kind of long, run-on sentence:

"Banks" started as little lending operations by guys who had vaults in their little artisan shops, and they had a little bit of gold that they wanted to keep safe, and because they had these vaults in their little Artisan shops they could keep other people's gold safe for them in those vaults as well, and they could issue little promissory notes to those people whose gold was stored in their vaults, and originally these folks made a little bit of money renting out space in the vault in which other people could store their gold, and then they started making a little more money when they began, at first, lending out their gold (with interest, of course), and then later on lending out little pieces of paper that represented a certain amounts-worth of gold---both their gold AND those folks who had their gold stored for safe keeping in their vaults---or using those now-accepted little pieces of paper themselves to lend to other people (more and more interest), and then even later on by creating more and more pieces of paper that were supposed to be backed by gold in the vault, but no one really knew what was in the vault so these guys could issue as much paper as they wanted: and they, in turn made more and more money off of the interest of their lending and hoped of course that people wouldn't all come to their vault at once and demand their gold instead of the little pieces of paper. That's banking 101, or banking in a nutshell.

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Of course you can recognize that centuries of European Colonialism and Expansionism (and subsequent American Expansionism and Globalization via the IMF and The World Bank) was funded either through the vaults of the throne, OR by "little pieces of paper that were accepted as representing a certain amount of gold" lent---at interest---by these guys who used to be Artisans who happened to have vaults, but now had become proto-bankers, or, money-lenders. And of course as these guys got richer and richer, and their operations became larger and larger, and their prestige and importance grew and grew, the "industry" of banking became a centerpiece in the evolution of the global economy.

Kind of intriguing, isn't it? Banking was born because sneaky guys with vaults found out that they could make money without really ever having to do any work. Seriously. The guys who at one time were Artisans---you know, like millers and silversmiths and distillers--- discovered that simply by charging rent, and then interest, vis-a-vis the storage of gold in their vaults and the creation of little pieces of paper that were, in theory, backed by that gold, they they could stop doing the labor, and stop producing the stuff that they had been producing all this time through all of their hard work, and simply sit back and watch their fortunes grow. Brilliant. And everyone soon came to rely upon the good favor of the banker, because no one's income vis-a-vis their production of goods and services allowed them to make ends meet. (Hmmm, I wonder why?)

And so now here we are, on the cusp of 2009. And what started out somewhat innocently, and arguably by accident, has evolved and morphed and mutated into the global economic foundation of a way of life. And it is banking that has finally---and irreparably---destroyed our civilization. Make no mistake about it: banking and the governments who facilitate banking (Fractional Reserve Banking within regimes of FIAT currency to be more specific) have, through their greed and accumulation of wealth based upon the production of NOTHING, led us to this point. Quadrillions of dollars of "wealth" created by and for armies of bankers and financiers and hedge fund managers who produce nothing. Nothing! And now, a brief eleven years after the birth of the derivatives market, another QUADRILLION dollars in DEBT: "wealth" that actually doesn't exist at all!! And we're all banging on the doors of the guys who have these vaults full of our "gold"---but the vaults are worse than empty: they are filled with TRILLIONS and TRILLIONS of dollars of worthless little pieces of paper. And all of our capital has been destroyed. And the entire banking industry---that usurious industry in which people sit back and make millions off of the work and production of the rest of us---the entire banking industry is insolvent, bankrupt, shipwrecked on a coral reef of DEBT. And when Paulson and Kashkari talk about lending money to "healthy" banks, they are lying. Because in this environment NO bank has assets in their vaults that could be considered healthy. Most banks are leveraged 30, 40, 50:1, debt to equity. But even banks that are leveraged 10:1, or even 5:1 (they don't exist, but just for arguments sake) are insolvent because NONE of that debt is being serviced. None of that debt can be serviced, because everyone is bankrupt. And when our money---OUR MONEY!!!---is given to these financial institutions by Paulson and Bernanke and Barney Frank and Nancy Pelosi in order to keep them from collapsing, please realize what this means: it means that our money is being given by the TRILLIONS of dollars to institutions that produce NOTHING, and whose only source of wealth is through loaning our money back to us and taking us for the interest!!!

So, what is to be done? I figure that the folks who have a stake in the survival of this system will do everything they can to keep this dirty little secret from the masses---that all money is debt, and that bankers and their agents in government become rich by maintaining a system in which the rest of us remain in debt servitude throughout our lives. I also think that only by becoming very small---subsisting in the smallest of communities and attempting to insulate ourselves from the usurious leeches---will we be able to eventually undermine the system enough and leave it mortally wounded. Unfortunately, as is easy to see, the rulers of this system will be damned if they're gonna let us get away with it.

Banking 101.