Crime Against Humanity: Fractional Reserve, Namely Legalized Counterfeiting, 5

Unfortunately, cartoon bombs have a downside: a burning fuse; so they must be dumped on someone else before they explode. Better yet if sold well. And that’s what securitisation is all about: you set up a pyramid scheme and you dump its burning fuse on someone else before it goes boom!, so it blows in the face of anyone but its instigators. In practice, securitisation is a further scam: you made profit by extending a loan that will hardly be repaid, so hardly anyone would take over your credit as such, isn’t it? Then you scramble the rotten eggs together with some good eggs and assorted spices et voilà, isn’t this new delicacy a bargain at that price? If you think the price we pay for the impunity provided by securitisation is intolerable, brace yourself for the order of magnitude it is going to reach thanks to central banking.

So much for now as to the conspicuous consequence of blurring, or plainly and simply removing, the distinction between investment banking and deposit banking. Now let’s dig underneath it into the inconspicuous consequence: debt or bailment, debtor or bailee? That is the question.

Back on Example Island, you deposit 10 units of money in your bank account. Your money, your account: emphasis added on the adjective: yours. Even though still conforming to the incredulous viewpoint, as soon as your money is into your account, the banker takes it and loans it. And the point is, you take that for granted: “everybody knows” bankers avail themselves of your money and that’s just the way it is. Wait a moment: did the banker have you undersign an investment for that money? No? Then it’s not investment banking; it’s deposit banking. And the money is yours; not the banker’s.

The key to the deceit here is comparing a deposit bank with any other storage; for example, comparing a money warehouse to a grain warehouse or a personal belongings warehouse. And I mean comparing them from a legal point of view, too.

Crime Against Humanity: Fractional Reserve, Namely Legalized Counterfeiting