Crime Against Humanity: the Holy GAAP, 20
Where did the banker take the money he loaned to the borrower, that is the question. According to the traditional banking gospel, the banker is a mere credit intermediary: he lends the money received and none else. But alas dogmas are bound to reveal their real nature under the erosive action of researchers throwing facts and evidences under the recalcitrant noses of people despite the barrage of police dogs.
We heard about the worldwide financial bubble: the amount of existing financial purchasing power on the planet is currently about tens and tens of times the amount of existing products and services. Consequences aside, this necessarily implies that someone creates those unspeakable amounts of purchasing power in monetary form and the alike, right? And if bankers were just those mere credit intermediaries their traditional dogma tells us about, then who would? Perhaps the central bankers whose traditional gospel is in turn “fighting inflation”, which may as well be reworded as “limiting the amount of existing money”? Given the position of central bankers in society, even us poor subjects of mainstream media would get to know about such a worldwide flagrant case of saying one thing and doing the opposite.
Let’s have another look at our ducks in a row, and review how the dots now connect to one another:
To give rise means, “to be the cause or source of; to produce.”
The IAS/IFRS’ Word is law, and It says:
The loan contract is a financial instrument.
A financial instrument gives rise to financial assets and financial liabilities.
A financial asset is cash or a contractual right to receive cash.
Cash is cash on hand or a demand deposit.
And now let’s connect the first and the last dot, directly:
The loan contract gives rise to the demand deposit. Which is cash.
Welcome to the tabernacle of the Holy Gaap.
How about halting some minutes in meditation, to confront it, its scope, its perpetrators, and its victims?
If there’s anything I ask of you, that is confront. An unlimited ability to face without flinching or avoiding. And if there is a single point where I ask all that of you, this is it.
