Why bankers rule the world

ruggedtoast

http://www.atimes.com/atimes/Global_Economy/NK14Dj01.html

In the 2012 edition of Occupy Money released this month, Professor Margrit Kennedy writes that a stunning 35% to 40% of everything we buy goes to interest. This interest goes to bankers, financiers, and bondholders, who take a 35% to 40% cut of our gross domestic product.

That helps explain how wealth is systematically transferred from Main Street to Wall Street. The rich get progressively richer at the expense of the poor, not just because of "Wall Street greed" but because of the inexorable mathematics of our private banking system.

grizzly1911

ruggedtoast wrote: »

http://www.atimes.com/atimes/Global_Economy/NK14Dj01.html

Someone will be along soon to tell us that this ultimately benefits the masses, through their pension schemes holding and ISA S&S holding, in shares of said banks. :doh:I've fallen for it.

Daedalus

Is it not the finance that allows for the other 60% to be made?

dryhat

grizzly1911 wrote: »

Someone will be along soon to tell us that this ultimately benefits the masses, through their pension schemes holding and ISA S&S holding, in shares of said banks. :doh:I've fallen for it.

Of course.

If they didn't lend us money, we wouldn't have any.

Generali

ruggedtoast wrote: »

http://www.atimes.com/atimes/Global_Economy/NK14Dj01.html

Just a thought here but doesn't the majority of interest paid on debt flow on to the banks' creditors; savers and investors?

I think the writer is falling into the trap of only looking at one side of the asset/liability equation.

Fella

It that was true then everyone could simply become a banker or buy shares in banks.

Unsurprisingly however, bankers aren't actually the cause of all the misery in the world. However they are a remarkably convenient target for everyone else to blame.

vivatifosi

If you look up the report's author, Margrit Kennedy, she's an architect with a particular perspective on small currencies and a book to sell. Interesting (if potentially flawed) outlook mind, but definitely from a particular standpoint.

chewmylegoff

ruggedtoast wrote: »

http://www.atimes.com/atimes/Global_Economy/NK14Dj01.html

don't buy stuff you can't afford then...

ruggedtoast

Generali wrote: »

Just a thought here but doesn't the majority of interest paid on debt flow on to the banks' creditors; savers and investors?

I think the writer is falling into the trap of only looking at one side of the asset/liability equation.

I don't have a problem with the fractional reserve system per se. It doesn't make a lot of sense to me as I don't see how it can be sustainable without endless growth and inflation; and the numerous booms and busts the world goes through seem to confirm this. Nevertheless I dont pretend to have the maths to investigate it.

I presume that if the banking system was nationalised in a perfect world, the interest everyone paid would just be jigged about to control inflation and growth and provide an alternative to taxation.

This isn't what happens though, and it seems to me that there are a number of individuals making an obscene amount of money just for having insinuated themselves between the borrower and the fiat creation.

I have some banking shares and I can see what the executives of my bank are getting and what dividend I am getting, and what savers are getting, and only one of those groups is getting rich.

antrobus

ruggedtoast wrote: »

http://www.atimes.com/atimes/Global_Economy/NK14Dj01.html

The lesson to be drawn from this is that, in the same way as only an idiot would ask an economist to build them a house, only an idiot would ask an architect to build them an economic system.

CLAPTON

ruggedtoast wrote: »

I don't have a problem with the fractional reserve system per se. It doesn't make a lot of sense to me as I don't see how it can be sustainable without endless growth and inflation; and the numerous booms and busts the world goes through seem to confirm this. Nevertheless I dont pretend to have the maths to investigate it.

I presume that if the banking system was nationalised in a perfect world, the interest everyone paid would just be jigged about to control inflation and growth and provide an alternative to taxation.

This isn't what happens though, and it seems to me that there are a number of individuals making an obscene amount of money just for having insinuated themselves between the borrower and the fiat creation.

I have some banking shares and I can see what the executives of my bank are getting and what dividend I am getting, and what savers are getting, and only one of those groups is getting rich.

I don't have a problem with the fractional reserve system per se. It doesn't make a lot of sense to me as I don't see how it can be sustainable without endless growth and inflation; and the numerous booms and busts the world goes through seem to confirm this. Nevertheless I dont pretend to have the maths to investigate it.

what has a fractional banking system got to do with 'endless' growth?

I presume that if the banking system was nationalised in a perfect world, the interest everyone paid would just be jigged about to control inflation and growth and provide an alternative to taxation.

in a fractional banking system the amount lent by banks is more than covered by the amount borrowed by banks.
'everyone' don't pay interest; some, the people who borrrow from bank pays interest, others who lend to bank receive interest; banks make their profit on the margin between the two flows.

This isn't what happens though, and it seems to me that there are a number of individuals making an obscene amount of money just for having insinuated themselves between the borrower and the fiat creation.

I have some banking shares and I can see what the executives of my bank are getting and what dividend I am getting, and what savers are getting, and only one of those groups is getting rich

you don't need to lend to banks; there are an increasing number of peer to peer lending/borrowing organisations that you can patronise instead.