Thursday, 3 June 2010

The Trouble with British banks

My last post explored how ISAs rip off the British public. How, if you buy an ISA, you are loaning thousands of pounds of your money to a bank, which via insider gambling and fractional reserve banking, can generate tens, if not hundreds, of thousands in bank profits. Your reward for loaning the bank its gambling stake? A small reduction in your capital. If you believe the banks' (arguably illegal) mis-selling sales pitch, you may - for example - lend £5,000 to the bank, receive a useless ISA certificate in return and, at the end of the year, when your loan is returned, wind up with a loss of between £150 and £300.
How can the banks even dream of perpetrating this kind of chicanery? How did they think they'd get away with it? Most of all: why are they getting away with it?
Then it hit me. Of course, the UK banks are a cartel - they're all working together. And they all have the same purpose: to get your savings. The ISA is just another in a long string of schemes that banks have devised to get their hands on your savings. When you borrow from a bank, you pay anything from 12% to 29% interest on the loan. When the bank borrows from you (current accounts, deposit accounts, ISAs etc) the bank pays you interest of only 0% - 5%.
Most people have been educated to put their savings in the bank. They've been taught that their money is safe in the bank; that they will, at least, get it back. Most people are afraid of gambling with their savings by buying commodities that they could later sell at a profit. Maybe the oil painting or antique chair or vintage car or small piece of land will depreciate in value? Maybe they will lose out? Also, they'll have to go through the palaver of finding a buyer for their commodity when the time comes. Banks are convenient. No hassle. Your money is safe. Most people are aware of inflation and know the government inflation figures are at least half the real rate of inflation - but they don't mind. They would rather lose a small amount of their savings by putting it into an ISA than risk losing a larger amount by investing in commodities.
Fear is king.
This is a pity because most people would be much better off if they were more courageous. If, for example, a year ago, instead of putting £5,000 into an ISA, you had spent £5,000 on gold sovereigns then, instead of making 3% (a loss of about £150 when adjusted for inflation) you would have made 41% - a real gain of about £1,800.

Why do people put their money in banks that short-change them rather than other things that don't? There are 3 reasons:
1) THE BANKING CARTEL, by working together, has got rid of competition. There is no bank in the UK that will pay you more than 5% for your money.
2) THE MEDIA. The corporate media, which is controlled by the banks, constantly tells you that ISAs are a good thing and that no-one can expect more than 5% on their money. They will never tell you, for example, that if you make a 12month loan to an Iranian bank, you will receive 17% interest.
3) THE GOVERNMENT, which may or may not be controlled by the banks, nonetheless always supports whatever the banks are doing - to the detriment of British citizens.

A few weeks ago, I heard Alex Jones on advise his listeners to take their money out of the big banks - the banks whose derivatives, naked short selling, credit-default swaps and other Ponzi schemes caused (and are still causing) the financial collapse. He advised his listeners to put their money into small independent banks.
That's when I realised that we in Britain are in deep trouble. You see, in the UK, there are, in effect, no small independent banks.
This is very serious. Why? Because we give the money we earn from working to a banking cartel that doesn't care about us. Money is freedom and power. We are giving our freedom and power to a ruthless, cold-blooded banking mafia intent on enriching itself at our expense.

Today, in Britain there are only 6 banks:
Royal Bank of Scotland
Halifax Bank of Scotland
Lloyds TSB
The Hongkong & Shanghai Banking Corporation (HSBC)

By the way, I've noticed that cartels generally consist of no more than 6 entities. The Hollywood cartel consists of 6 companies: Universal, Warner Bros, Paramount, Sony, Fox and Disney. Attempts to start a 7th studio (such as United Artists or Dreamworks) or maintain a 7th studio (such as MGM or Columbia) have never succeeded for more than a short time.It appears that when you have more than six companies working together, something happens to cause internal division and the alliance fails.

The Opec oil producing cartel was successful when it consisted of Saudi Arabia, Iran, Venezuela, Iraq, Libya and Algeria - 6 entities. But when it was joined by Qatar, Kuwait, United Arab Emirates, Nigeria and Indonesia, it fell apart.

Anyway, 50 years ago the UK did not have a banking cartel. There were lots of banks - some large, some small. These included National Provincial, Coutts, Lloyds, Westminster, Trustee Savings Bank, Barclays, Cooperative, Alliance, Royal Bank of Scotland, Bank of Scotland, Bank of Wales, Bank of Ulster, Hibernian, Leicester, District, Midland and many more.
Interestingly, during the greatest increase in Britain's prosperity between 1870 and 1910 (when GDP was more than 10% per year) there were 96 banks with 3,776 branches. So, during our most wealth-increasing period there was no banking cartel and healthy competition between the banks that benefited the man in the street, free-enterprise and society as a whole.

(A side note: during this period, the top rate of income tax was 10%. History shows repeatedly that if a government cuts taxes, it increases its revenues. When John F Kennedy cut taxes by 40% in 1960, tax revenues doubled.)

So what happened with the UK banks?
Basically, since 1910, through government supported mergers and acquisitions, they consolidated into a 6-bank cartel.
At one time, the banks were good servants of the people who created the wealth. Today, the banks are our masters, restricting free-enterprise, causing a steady decline in prosperity (and the freedom that comes with it) and transferring the dwindling wealth created by the populace to a small, parasitic class of plutocrats.
It's been said before but I'll say it again because it's apt: the banking cartel have engineered an economic system where they are the plantation owners and we are their slaves. When, as they intend to do, they phase out cash and we can only buy and sell using electronically transferable bank credits, they will be in total dictatorial control.

So, what can we do?
1. Take as much money as we conveniently can out of the banks, convert it into gold and silver and keep it secure in a well-hidden safe.
2. Pay for everything in cash.
3. Cancel all direct debits (especially 'variable' directs debits, which are a license to steal) and pay by cheque.
3. Try not to enter into agreements where you cannot pay with cash. These are usually the utility companies so find ways to get off the grid by producing your own heat, electricity and water. The technology exists to do this but local governments try to stop it by requiring 'planning permission' and/or licenses (which they don't grant).
However, for an investment of about £2000 you can get an atmospheric water generator and a hook up to your plumbing, providing good clean water without hormones or drug residues. For an investment of about £24,000 you can install solar panels, inverters and batteries providing enough electricity for a small house or large flat for most of the year. During the winter months, when sunlight is limited, you will need to rely on the mains grid unless you have enough land to sink a geothermal well and produce electricity from hot rocks below the soil.
Hot water can accomplished by solar water heating units, requiring a further investment of about £9,000. Heating of the house can be achieved by efficient wood-burning stoves and other methods I leave you to research.
There are new technologies imminent that could make all this easier. I learned recently about a new atmospheric water generator invented in Canada that, if mass-produced, would be inexpensive to install and produce both hot and cold pure water. I've also heard of new nano-photo-voltaic cells that can absorb double the photon-energy of current solar panels.
Also, if government can be persuaded to get out of the way, a new generation of near-silent, highly efficient wind turbines could solve the problem of generating electricity during the British winters.
Okay, so they won't let you have a landline telephone without a direct debit - pay by cheque. They charge you extra for paying by cheque and, in order to cover the cheque you have to loan money to the bank in the form of a current account balance, so cancel the landline and use a mobile phone instead. Don't make a contract with a mobile network (which requires direct debits) use pay-as-you-go.
Write letters and postcards.

We know we can't rely on government to protect us by enforcing anti-trust laws. As others have observed, all current governments (not just our own) are joined at the hip with the big banks and corporations. We live in a corporatocracy, not a democracy. But we may be able to get out from under if we increase our self-reliance, boycott the banks and corporations as much as possible and, for all our transactions, use cash.