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The fraudulent transformation of the banking industry

July 22, 2016

Here is a great piece by our friend Dan over, founder of Myrmikan Capital based in New York. Dan takes a look at the current banking system in the US and how one deposit can create 10 times that amount of debt. He takes the concept one step further to show how this system is creating unwanted assets and how banks around the world (especially in Europe) are starting to crack. In a free economy this system would not work but unfortunately that is not the system we have…

We will have Dan on the weekend show to discuss this topic in further depth. Be sure to tune in.

Click here to read his article. Myrmikan_Research_2016_07_20

Discussion
7 Comments
    CFS
    Jul 22, 2016 22:30 AM

    While what Mr. Oliver writes is true, that is not the real problem with banks, IMHO.
    There is no real problem with small banks, credit unions, and savings and loans, that operate on a partial float system. There really is no need for a bank to have more than a few percent of deposited money on hand.
    The real problem is what the big banks do with depositor’s money.
    They take that money and use it to fund hedge funds, make derivative bets, etc., using high leverage to gamble with what should morally be the depositor’s money.
    This co-mingling of depositor’s funds and investment funds was not allowed until the removal of the Glass-Steagall Act.
    And, of course, more recently the “depositor’s money” is not even the depositor’s money, but an unsecured loan to the bank. How immoral was that change?
    The US has the best system lobbyists for the bankers could buy.

      cmc
      Jul 22, 2016 22:04 PM

      “There is no real problem with small banks, credit unions, and savings and loans, that operate on a partial float system. There really is no need for a bank to have more than a few percent of deposited money on hand.”

      Except that is legalized fraud. Depositor’s money can’t be in two places at once. Safely locked up in a vault and at the same time loaned out to other people. There is a place to invest a portion of your money with someone at risk and interest, and your checking account is not one of them.

    Jul 22, 2016 22:51 AM

    Lay the repeal of GS solely and solely alone to to the Uber Demon – Robert Rubin who still lingers in the background of this current administration slithering his ways to benefit the chosen Few!

    Jul 22, 2016 22:53 AM

    I can’t imagine how many lawyers there are in Washington, working for the various banking and special interest groups both domestic and International. What does the consumer get for these lousy trade deals like TPP, he gets shoddy cheap foreign goods not only from China but Europe and The multinational US companies that have moved overseas and continue to plunder The American homeland. Globalist’s is what they call themselves as they pillage and plunder what little wealth is left in our countries. The German economy which was generously salvaged by The Marshall plan after World War II, now ships us millions of cars that have been rigged to misrepresent the actual mileage results. When do you ever see China, Germany, Japan, or South Korea, yes and poor little Mexico, help the rest of The World when there is a humanitarian crisis. They are only interested in gaining wealth from protected trade deals while giving nothing back to other’s. I wouldn’t want to go back to any of them with cap in hand and say may we have a little more please, the door will soon get slammed shut good and tight. DT

      Jul 22, 2016 22:13 AM

      Now, who thinks Trump isn’t right about renegotiating lousy trade deals. Getting beat fair and square is one thing but giving your industry away to others who only care about themselves means you are suckered. DT

    CFS
    Jul 22, 2016 22:14 PM

    I think Hillary is absolutely not a reasonable choice.

    However, based on my judgement of Trump’s general knowledge and intellect, I find it hard to believe he will be able to outsmart the Chinese to get a better deal.
    So far he has demonstrated little real knowledge of economics or trade, but I hope and pray, that as President, he would pick good advisors.

    B
    Jul 22, 2016 22:40 PM

    Didnt Trump mention re enstating glass stegall?

    I dont blame these other countries for getting what they can, look around at what the U.S. has taken from people.

    Trump may very well be able to negotiate “better” deals, the issue to me is pretty much every word he says is a lie.
    We know what we get with Hillary, at least we get a gamble with Trump.
    In theory anyway, its the banksl actually running the place.

    Check Orlov if interested, he researched the heck outta it.

    Dmitry Orlov, author of The Collapse Gap. the website is; CLUBORLOV

    A recent interview; http://www.maxkeiser.com/#ZymQ4tOBU0bUVLcp.99