Why are you opposed to banking activities Catknight?
Have you ever bought items on credit?
That credit you used is based on the banking and financial system.
I think that is due to lack of financial discipline.
Banking and financial system has its faults and corruption and sometimes their own hidden agendas, but all industries have the same problems. No need to single out bankers.
See:
In addition to these pragmatic goals, the powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole.
This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences.
The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations.
Originally posted by Catknight:Maybe you’re a beneficiary of the present banking system for you do not see the injustice that was brought upon the common men weighed by mortages and piled by debt that he cannot repay
A knife can be use to cut your tenderloin steak and it can also be use as a weapon to kill someone.
Our modern society as we know it cannot function without banks. It's not just you and I buying things using credit cards or having check books. Even more important is business activity. People don't build factories or buildings using 100% cash. Companies don't ship billions of dollars worth of goods around the world on a COD basis. That would be inefficient and stupid.
Yes, humanity could have a functioning society without banks, but we would have to go back about 500 years. Peasants who eat what they farm and build their houses using their own hands don't need banks. But is this really what you want? Do you think being a peasant going out to the fields to work every day is a better life?
Let us imagine a life without banks. You will have to keep all your cash at home, which is probably not very safe. So if a thief came to your house and took all your money, that's it. You will also only be able to buy what you have cash holdings. So if you don't have, say $1mln in hard cash, you can forget about buying that condo. If you don't have even, say $5,000 in hard cash, you can forget about buying that plasma TV.
Things are even worse for businesses. If you can only expand your business operations using cash holdings, the economy will expand much slower. Less factories, office buildings etc will be built. So there will be less non-farming employment around.
That's why only peasant societies where most of the population are farming the land can operate without banks.
The greatest contribution of the banking and credit system is that it allows us all to "smooth" our earnings through our lifetimes. This means that you don't have to wait until you are 60yo, and have saved up $1mln or whatever, before you can buy a house. You can buy a house in your 20s or 30s by borrowing money from a bank and then paying it off over time.
People complain about mortgages, but what if there were no such thing as mortgages? You will have to build your house yourself, just like farmers in the old days, but even then you need cash to buy the land. Or you will have to save cash over a lifetime. In my opinion, I rather buy a house on mortgage when I'm young and pay for it over 20-30 years, instead of living with my parents until I have saved enough cash to fully buy my own house.
Now banks are not entirely a good thing. See all the problems that has happened with them in the US subprime problems. But you don't throw the baby out with the bathwater. People with credit problems - too much credit card debt for instance - have to blame themselves instead of the banks for their problems. Nobody forces anyone to overspend.
Originally posted by Catknight:Our forefathers have been living without banking system for centuries and they did not starve and in fact have more children and free time after work…
Usury is a mortal sin and is condemned by both religous and political leaders…Civilised societies are destroyed by the banking elite .Look at the American civil war between the north federal and southern confederates…on the surface it’s about freeing the slaves but it’s actually industrialised banking world vs landed agrarian world and in the end the industrial north won…
If anyone watch cold mountain last week,,it’s more than a romantic film but tells a vivid story of human greed and love of the 2 opposing worlds.Wars are fought and again the bankers bet on both sides..Abraham lincoln once said he has 2 foes in front was the confederate army and his back the bankers who are more dangerous
How the hell can u compare our lifestyle to theirs?
Our society and technology then and now is totally diff.
A meal can cost 20cents then but now? 3.50 is the minimum amt to eat at certain kpt.
Dear Catknight,
I respect your wish for a simpler agrarian life. In that case, what are you doing on the Internet? By the way, do you eat what you farm or hunt? Did you build your house using your own hands? I respect people of principle who live according to what they preach.
The problem is that I think most people in Singapore would prefer to live in a modern society, and you cannot separate the credit-banking system from such a society in my opinion.
Dear everyone,
It's indeed true that the banking system as it currently stands is a blight to compassionate and equitable society. We are not talking about doing away with banking. Rather, the system needs lotsa major reforms to do what it should be doing: serve the common good. Below are a fewl reforms our current banking system desperately needs:
1) Nowadays banks are so huge that they always get bailed out (ref sub-prime) by Govt. Since risk cannot be privatised, it is time to nationalize ALL banks of any significance. This prevents power and profits from being privatized.
2) Fractional reserve requirements should be much higher. The young may still loan $$ they do not currently have for big ticket items like housing, but it MUST largely be backed up by savings from older savers rather than created thru the press of a key.
3) Do away with compounded interest. It is not in accordance with physical realities for natural quantities, which the compounded amount is "supposed" to correspond to, to increase exponentially. Instead the interest should calculated based on a fixed % of original principal.
Full-reserve banking
http://en.wikipedia.org/wiki/Full-reserve_banking
Fractional-reserve banking
http://en.wikipedia.org/wiki/Fractional-reserve_banking
For a description of how banking systems developed over time and their effects on the economy, see:
http://real-world-news.org/bk-quigley/02.html#5
There is a co-relation between interest rates and risks of default. High risks of default have to be compensated to the bank by high interest rates. 'Greedy bankers' eyeing the interest rates not and looking beyond stage 1 will issue many of these high risk sub prime loans but in the end they will reap what they sow as you can see whats happening in America now...
Otherwise in a free market i believe interest rates should be fair - it has to be or a bank will be outdone by its competitors.
By the way it is particularly disappointing and shocking to see such words coming from the former head of the Bank of England. Banks contribute much to the economy by acting as financial intermediaries without them we'd still be living in the stone age.. For their contribution to people's lives and to the economy how could he say that banking was conceived in inquity and born in sin?
Sometimes people feel the worst enemies of the jews are their own jewish banking and media elites, I've to agree to this to a certain extent that the elite self serving natures betray even their own creed
Sir Josiah Stamp wasn't wrong. If you look at the quote, it says banking is evil because it allows bankers to enslave others fraudulently...which is actually the case. If banks were wholly owned by citizenships on an equal basis, then the story would have been totally different.
In reality, the citizens of most countries do not need rich people's capital. Collectively, they are ultra rich. Of course true private land ownership must be abolished beforehand. Look at the size of SWFs like our Temasek and GIC! All from the citizens of the red dot!
In this light, these "people" you speak of must logically support the anti-Chinese riots in Indonesia in 1998 because the Chinese was exploiting the poor Indonesians through their control of the economy?
First of all, do you even understand the economic/financial consequences of full-reserve banking or a public sector banking system? For the benefit of those that don't, please allow me explain. The bank-led private credit market exists because of fractional reserve banking, which means that a bank does not need to keep all its liabilities (deposits) in its vault. In other words, a bank holding say $1bln amount of deposits, does not need to keep $1bln in reserves. So what does it do with the rest of the money? It lends them out, and the banks makes a profit from the difference between the interest rate on what the bank gets from its loans and what it pays its deposit accounts. So a bank can make housing loans, commercial loans etc. because it does not need to have 100% reserves for the deposits it holds.
What is the implication of a full-reserve banking system? It means that the bank cannot lend money because if it must keep 100% in reserves to cover all its liabilities (deposits), then naturally the bank cannot make any loans.
Then the question becomes who will do the lending? There are 2 possibilities. One is there is no lending at all, except for loan sharks. But in my mind, as per my original post on this thread, only an under-developed agrarian economy where people eat what they farm and build their own homes can exist in an economic regime where there is virtually no credit system.
The other possibility is that the government provides the lending. Now Singaporeans with little knowledge of other countries' experiences with a full public-banking system might think what's so bad about this! After all, we have such an efficient and clean government right! It must be a better and fairer system than private sector banks!
Anyone who has studied global economics and finance knows full well the sorry experience with government-controlled banking systems. If you don't believe me, just read this World Bank study at
http://info.worldbank.org/etools/docs/library/83775/hanson2%5B1%5D.ppt#1
Slide 6 sums out the general experience of a full public sector banking system well:
1) Most have done badly
2) High non-performing loans
3) Higher spreads, meaning higher interest rates than from private sector banks
4) Biased to lend to government officials/companies
Of course, there are some successes, but most countries following a full public sector banking system have done badly. There are lots of papers and books written about this, but they are usually written for people with an economics background.
It is very easy to understand why public sector banking does not work well. When politicians control a bank, they like to use it to reward their friends and supporters to ensure their popularity. Whether the bank is making good loans or not is a secondary concern. This may be difficult for Singaporeans who have never experienced any other political system than PAP dominance, but imagine you live in a country where you cannot take your political support for granted, where you can bribe people to support you. Imagine what you would do if you were Suharto or Thaksin, and could control banks. Naturally, you keep your friends and supporters happy by giving them cheap loans, and who cares if they even bother to pay it back.
That is why the consensus of economists worldwide, except for the occasional crank, is that a fractional reserve private sector banking system, for all its faults, beats either a full-reserve system or a public sector banking system. At the very least, one could easily say that a public sector banking system is no better than a private sector one, and you simply trade one set of problems for another.
A brief description of economic operations and interactions between government, banks, industry, producers, consumers and labour can be found here:
http://real-world-news.org/bk-quigley/11.html
Go for social credit system..this banking system is beyond socialism and capitalism however no governments done it in amass scale.
Banks generate the current slavery of humanity.
the federal reserve in america and banks worldwide are quasi-public, meaning they are in fact to a large extent, PRIVATE organisations. Central banks are created to STEAL the weath of nations. Every dollar that is printed by the central bank is LOANED to the governmet at INTEREST and where does the money to pay for the interest come from? The central bank of course. Debt upon more debt, resulting in nothing less than the slavery of the people because this loan can never be repaid. This puts control in the hands of a few men.
Look at dollar bills worldwide. They are said to be "legal tender". Decades ago money was legally exchangable for its worth in GOLD or other precious metals. Today it is worth nothing. It is worthless paper and it value comes from only and i mean only the amount currently in circulation.
And the Central bank controls 1)interest rates and 2) inflation.
Bankers start wars, wars mean profit because the government has to borrow even more money. JD rockerfeller, an american international banker made 200million out of WW1 convertable to MORE THAN A TRILLION TODAY. wake up la.
First of all, do you even understand the economic/financial consequences of full-reserve banking or a public sector banking system?"
Camb76, pls observe propriety and courtesy in the public forum. Look at these 3 sentences by you, do they add a single iota of clarity to this thread? No, the rude & condescending tone merely distracts from the discussion. If everyone were of the same thinking and "education", then why bother to have a forum?
I did not mention abt full reserve banking. I did mention abt "nationalizing banks" and "banks to be wholly owned by citizenships on an equal basis". I am most certainly not referring to the kind of public banks, suspectible to political influence, that you mention about. Look at the US system. The Federal Reserve Bank is actually a group of private banks from whom the govt lends money. And what i'm proposing is equivalent to the shares of this group of private banks be in the hands of citizens on an equal basis. In this way, Govt cannot dip its hands into the honeypot and all risks and rewards are shared equally by the citizenry. CEOs will be paid according to performance and not exhorbitantly and out of line with public expectations, enabled by director cronynism, akin to the govt cronyism you sneered at.
Dear gartheven,
Did I specifically direct my prior post at you? If you read the various posts carefully, there are indeed certain people here who do advocate a full reserve banking system.
Moreover, I fail to see the practical difference of your "nationalised and citizen-owned" banking system from the usual type of government-controlled banks.
Maybe I'm too cynical, or you are too idealistic or a combination of both.
To say that all citizens should own banks jointly and equally is very nice, but how does one implement it? As the popular saying goes, public property belongs to no one. That's why people treat public property worse than they treat their own property. A bank that belongs to everyone will in practical terms belong to no one, and will be exploited by the powerful.
Let us say we indeed establish a bank owned equally by the citizens as you propose, who will actually control it? Will there be a full popular referendum of all citizens to approve the board of directors? Will there be a referendum on each senior management appointment? Will there be a referendum on each loan proposal?
Of course not! You would have referendums every day! It is not cheap to organise national elections on a daily basis you know. Furthermore, even if daily referendums were practicable, is it the best way to run a bank? What proportion of the citizenry are equipped with the necessary knowledge to judge market risk, credit risk, macroeconomic outlook etc. so that they could make informed business decisions for this hypothetical bank?
What will happen realistically is that the government "acting on the people's behalf" will appoint the board of directors, who will then apoint the senior managers, who will then make the day-to-day business decisions of this "citizen-owned" bank.
In practical terms, I don't see how such a bank is a different animal from the usual public sector banks we have seen.
From historical experience globally, a public sector banking system is evidently not the cure of the problems associated with a private sector banking system. It breeds its own set of major problems.
In fact there is a good example of how shares of companies distributed among the citizens ends up being amassed by the powerful and cunning. During the Yeltsin presidency in Russia, one of the schemes concocted to reform the Russian economy was to distribute shares of each hitherto state-owned enterprise among the workers. All workers having a share in the company is all very idealistic yes?
What actually happened was that cunning people, usually the managers, offered money to the workers who happily sold them the shares cheaply. This gave rise to the Russian oligarchs, who became billionaires overnight, commanding large stakes of the Russian economy. The workers were simply too stupid to understand what the shares they were holding were really worth, so they happily sold them to their managers for a pittance.
After all, what is the true value of a share of public property? Who really knows if there is no private market for it? Only the managers would know. Anyway, the point is that you cannot expect the people in power to be angels, and public ownership sounds nice but is usually not so nice when implemented.