The Banking Racket Rip Off
27 June 2017 | Pago Pago, American Samoa
One of the great rip offs of the American people is that banks are authorized to create money out of thin air and charge interest on it without paying the government one red cent for that franchise privilege.
But the situation is actually made much worse as a matter of federal policy. The Fed has driven us into a near zero interest rate environment and lends to those banks at close to that, large sums of money. Banks now in turn make mortgage and consumer loans to Americans at significantly higher interest rates. They are licensed if not to kill, then to extract large interest sums form the population totally free. The true opportunity cost of a dollar these days is almost zero.
But it gets worse. Banks also create credit cards. The average credit card interest rate is 18%. Some go to 25% This is deemed lawful. So when the Fed raises the discount rate by 5 basis points, that will translate on an 18% charge to a 2% increase in credit card interest rates. All lawful. The usury laws, like the antitrust laws are dead in the water. Not even bankruptcy, allows you to escape this racket on credit card debt. Bank's risk goes down, but not the credit card rate.
Isn't this situation totally outrageous? The system is rigged to screw the people by guys who bring essentially nothing of their own to the table. An unlevel playing field in the extreme. A racket.
The obvious solution is to allow application of sensible usury restrictions and the antitrust laws to banks and their transactions and, further, to have the federal government charge banks a healthy franchise fee for the right to create money out of thin air and lend it at interest.