Bankrupt Banks

125 banks have gone belly up so far this year.

I think it's astounding that any bank could possibly ever go broke. In a usury-free world, this would never happen.

Imagine that through some freak accident of DNA mutation caused by genetically modified food, I suddenly transformed into a banker.

Banks are authorized by our government to create new money in digital form. They can't actually print money, but bills and coins make up only 3% of "money" today. The rest of our money exists only as numbers inside banking system computers.

When someone takes a home loan at my bank, I get title to his house until he pays off the loan. If he stops paying me, I take his house, sell it and keep all the money up to whatever he owes.

Even if I don't charge interest, the payment of principle alone is all profit for me. I didn't really work for the money I loaned out, the government just let me create it! Easy money.

Every aspect of the loan has been verified, insured and even federally garuanteed. I get risk-free profit from this deal for years to come. What a great job!

The trouble comes from charging interest.

If a house is worth $100,000 and a bank creates $100,000 out of thin air against it, everything is in balance. There is enough money put into the world to make all of the payments on the loan. Debits and credits are in balance.

When a bank charges interest, they demand more money than they create, causing an imbalance in the money supply. More money is owed than exists. Eventually, someone comes up short and can't pay. The more money is lent at interest, the harder it is for customers to make payments.

My own greed to charge interest on money that was never really mine to start with (multiplied of course by all the other bankers doing the same thing) is what will eventually kill my bank. Suddenly, the money doesn't look so easy.

When a bank charges interest on a loan, they are charging more for something than it is worth. They can do this by colluding to set minimum interest rates -- making it impossible for a free market system to ever work. They doom themselves to fail.

The US government doesn't help the situation by making stupid rules such as the "Applicable Federal Rates."

http://www.irs.gov/app/picklist/list/federalRates.html

There is a bitter irony to the banker's situation, isn't there? It would be funny except for the "too big to fail" idea that pushes unpaid debt onto taxpayer accounts.

Until banks figure out they are drinking their own poison, expect an endless stream of bank closures.

(I do NOT endorse the usury promoted by Dr. Rose.)

Please ignore the conclusion in the above video that fractional lending is the cause of inflation.

In reality, there is no reason for any reserve at all. The only limit to the creation of debt is the existence of credit.

As for David Icke's video at the top, he's pretty much spot on. Only small banks are failing, and they are being gobbled up by the elite banking families at the top of the money pyramid.