Tuesday, August 01, 2006

Banks control our lives

"It is well enough that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."
- Henry Ford

Why is the first Henry Ford worth quoting? He had two failed businesses before he finally got his production-line auto business to work successfully. He knew banks.

What could he have been talking about? Maybe the fact that banks often sponsor both sides in wars. In the Second World War, for example, US banks loaned money to Hitler to conduct his construction of weapons. The owner of one of those banks even became a US senator, though he had to resign in disgrace when his previous association with the Nazis was made public. US banks today often fund the purchase of weapons for both sides in wars in which the US is involved. Wars exist because banks fund them.

Maybe Ford meant that banks routinely loan money to people who already have enough equity to secure loans (to people who don't really need it) while they may deny loans to those who have excellent personal or business plans. At the same time they invest heavily in loans to poor nations, at high interest rates, even though sometimes the poor nations default on their loans and the "hometown" bank customers must pay extra for the bank sevices that formerly were offered without a fee.

Today you can't have a business discussion with business loan people in some banks without paying a hefty fee, even though the discussion centres around a business loan from that bank. Yes, you have to pay the bank to discuss the possibility of borrowing money from them. If the loan officer discusses his golf game or his upcoming vacation, the customer still pays. There are exceptions within the banking system, of course, especially where a bank is anxious to loan its money because it has not reached its quota for the month.

Banks today exact fees for everything, even for exchanging one denomination of cash for others of the same currency.

The larger banks are the most profitable businesses in most countries. You know who keeps them in business--you, one way or another.

Their most profitable business investments are loans which produce interest. And whose money do they use to make those loans? Always someone else's money.

Henry Ford may not have been correct about a revolution before tomorrow morning. But he was on the right track.

Bill Allin
'Turning It Around: Causes and Cures for Today's Epidemic Social Problems,' striving to help you be a more informed consumer.
Learn more at http://billallin.com

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