[pp.int.general] [Pp-leaders.discussion] EU: ESM-treaty

Antonio Garcia ningunotro at hotmail.com
Sun Nov 6 14:56:40 CET 2011

The problem about banks going bust is the fact that banks have access to the miracle procedure of fractional reserve lending whereby for any 1.000$ or € they receive in deposits they can automagically mobilize 10.000$ or € to lend to their friends (like the shameless top of the icelandic banking system did securing loans among themselves) at preferential rates or to ordinary citizens at rates caracterized as usury... so what we are actually living is a strategy that aims to get little banks busted and bought by a few big banks in order to limit the quantity of those that can continue to benefit from the miracle of fractional reserve lending. Of course, national elites and national governments are well aware of the fact that they can not allow this movement of concentration to go as far as to have NO LOCAL BANK serving their LOCAL INTERESTS in their own country with access to the miracle of fractional reserve lending. That is why they have to establish criteria that enable them to save at least one bank in their area of influence, and in Europe this means there is a struggle between those that think that their preferred sphere of influence is the nation state, and those that think their interests are best served by the establishment of an Europe-wide structure (if possible with less interference from the wishes of the national populations, and thus the dominance of administrative powers beyond the reach of the influence of "democratically" elected national parliaments that have to respect the wishes of their populations and devote resources to social matters because otherwise they would fail to be reelected).
Banks thrived because they cheated everyone with the fractional reserve lending procedure, which was nothing less than a "gentlemans agreement" between felon brethen so as to not kill by overexploitation the chicken with the golden eggs. The 10% or 10x limit was an autoimposed limitation based on statistical evidence about the real circulation of deposited amounts of gold in the vaults... if only 10% of the amounts deposited where withdrawn to circulate as cash... the 100% of the amounts deposited could be used under normal circumstances as 100% of the 10% that was to circulate as cash... for an amount of 10x the real deposits (the 9/10ths of all money thus circulating being under the discrete control of the bankers without them having to do any more than the intellectual effort to create it and have it at their disposal). Thus we get a skewed economy where the real productive forces create 1.000 units of wealth and get paid 1.000 credits (a little less, but for simplicities sake...). As soon as they bring their salary to the bank then the bank can move 10.000 credits, 1.000 on the account of the worker, 9.000 they can dispose of discretely. One effect is that as only 1.000 units of wealth exist but 10.000 credits... ultimately all wealkth will be traded for all credits, and the worker can only buy 1/10 of his own production while the banks get 9/10 without more effort than "printing the money". One other effect is that eventually, with inflation ocurring... we will get to a point where the 1.000 credits the worker gets paid for his production... no longer suffice to pay for the cost of living for the period he is being paid for... and he no longer reaches the end of the month with his devalued salary.

The real question is for how long we still plant to tolerate that banks thrive on such unfair an advantage. Of course, all banks, not only those of countries not smart enough to realize the competitive edge of having access to the unfair advantage of fractional reserve lending.
The 2008 financial crisis was caused because some smart banking asses succeeded in implementing a mechanism that circumvented the voluntary regulations of the banking cartel regarding the 10x limit on fractional reserve lending without breaking the accepted rules... titrization. This takes loans that formpart of the 10x contingent and sells them away for a little less than the total expected benefit, thus creating room for the issuance of more loans to refill the created gap, while at the same time the monies received are clean funds that can be injected into the total resource base that serves as reference to be multiplied by 10 in the fractional reserve process. Of course, this enormous breach of the "do not kill the chicken with the golden eggs" procedures that could not be stopped because it breached no formally agreed rules... could but fail to cause the total collapse of the finantial system sooner or later... so the smartes people rushed to cash in on the benefits as ruthless as possible... and this is where they decided to speed up titrization beyond any rational behaviour and pack whatever crap someone would put a signature under any amount. Because once the crap sold the benefits were cashed and the risks were for the careless buyer who would hold the titles when the bubble bust. Those that were well aware of the risks hold the titles in transit the shortest time possible to be able to cash in some clean benefit in the transaction, those that weren't stacked titrization certificates as part of their own funds... and got in serious trouble when the bubble busted.
Considering what really happened, as peoples we neither deserve to have to default not to have to continue in poverty... the whole financial construct is an intellectual framework we should reject, nullifiing the accumulated effects stacked by those that have been profiting from the trick since the beginning.
Withdrawing money from felon banks and putting it into ethical banks (any one not using fractional reserve banking anywhere? Do not be stupid fools.) or under the mattress is POINTLESS other than shaking the fundations of small banks and thus favouring the concentration process the big banks are pushing for anyway. As long as we assign value to existing bank notes, even the little 1.000$ or € we monthly get as salary... all of us are lending value to the millions of banknotes they can print (or already stack somewhere having printed them before), and they will continue to steal the biggest part of our production. The only alternative is to forget all existing money and to establish new mechanisms for the fair exchange of our productions they no longer get a foothold on nor can control to their advantage.
They have transformed a big chunk of the produced money into the ownership of strategical physical goods... they will only loose control of when they no longer have the means to pay people to guard and clean their buildings...
As soon as we ban existing money reserves by simply refusing to use them, we the 99% will be in complete control of our destiny as they won't be able to pay for any service with the fake wealth they accumulate and there will not be enough of them to get all the efforts done to maintain their status and posessions in operable conditions.
Perpetual poverty is not a bad solution to start with... who will care about the fact that it is technically called poverty... when it is the situation almost all of us share, it will be normality, and from then on we can reuse our intellectual capacities to find new and equitable ways of improving our general condition without anybody having the unfair advantage of being able to print all the money and be the one who is to decide what it should be used for in the first place.

> Date: Sun, 6 Nov 2011 07:10:50 -0500
> From: rms at gnu.org
> To: pp.international.general at lists.pirateweb.net
> CC: pp.international.general at lists.pirateweb.net
> Subject: Re: [pp.int.general] [Pp-leaders.discussion] EU: ESM-treaty
> i have difficulties seeing the greek, or any other nationality, becoming 
> much happier from banks going bust. basically, what they are protesting 
> for is the right and entitlement to a decent life including health care 
> and schooling, education, housing, etc. at least this is what the greek 
> "don't pay"-protest leaders told el país week before last.
> The question is whether default would be less bad than perpetual poverty.
> -- 
> Dr Richard Stallman
> President, Free Software Foundation
> 51 Franklin St
> Boston MA 02110
> www.fsf.org www.gnu.org
> Skype: No way! That's nonfree (freedom-denying) software.
> Use free telephony http://directory.fsf.org/category/tel/
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