THE EXTENT TO WHICH THE BANKS STEAL YOUR MONEY - From: Ardeshir Mehta

Banks charge interest on loans, of which the principal they create
out of thin air. (If you don't already know this, you have some
serious reading to do: try for instance the on-line "Bank of Canada
Tutorial" of the Canadian Action Party, which starts at
http://www.canadianactionparty.ca/bankofcanada.html
)

The interest - normally between 3% and 10% per annum - appears small,
but it is COMPOUND interest, which means that if the loan is paid off
over a long enough term, it can amount to as much as the principal!

For example, if the bank loans you $100,000 to buy a home - a loan
which is technically called a "mortgage", but it's basically just a
loan - and charges you, say, 7% interest on the money, and if the
mortgage is to be paid back over 25 years, your payments to the bank
would be $706.78 a month. (Check this out with any mortgage
calculator - there are plenty available on-line). Thus the total
amount you would be paying the bank back over the 25 years would be
$(706.78 x 12 x 25)=$212,034 ... which is more than DOUBLE the amount
of the loan!

Note that the bank would be taking NO RISKS WHATSOEVER when issuing
you the loan. The bank would lose NOTHING if you were to default on
your mortgage, because banks always secure every mortgage against the
house itself - which is to say, they would never loan you more money
to buy the house than what the bank's owners figure might reasonably
be the LOWEST price for which the house might sell during the period
of the mortgage!

So think about what the bank does. It creates the loan at absolutely
NO cost to itself, simply by writing out a cheque for $100,000. Then
it sits back, and over 25 years, pockets the interest without doing
anything - interest which BY ITSELF totals more than the amount of
money lent. And of course, the principal has to be paid back as well.

Note that if the interest rate had been zero, your monthly payments
would have been $(100,000/300) =$333.33, which is less than HALF what
you would have to pay to the bank every month if the interest rate of
the mortgage were 7%. Even if the bank were to charge you a measly 4%
interest (and good luck finding a bank that will offer you a mortgage
at that low an interest rate!), your monthly payments would still be
$527.84 a month, which is almost $200 more - which is to say almost
60% more - than what you would be paying at zero per cent interest.

And it's not just on your house that the bank screws you over. If you
were to take out a loan to buy a car, say, you would be in a similar
situation. If your car cost, say, $20,000, and the bank loaned the
$20,000 to you at 7% interest, and if the loan was to be paid back
over 5 years, you would end up paying $28,352.48 to the bank over the
5 years of the loan. That's $8,352.48 - almost HALF the sale price of
the car - going to the bank for which the bank has done nothing
whatsoever!

TALK ABOUT A CON.

You might think you could avoid being conned if you were to pay cash
for everything, and not taking out any loans ... but you would be
gravely mistaken. Take for example that $20,000 car. Suppose you paid
cash for it, thus avoiding paying interest to YOUR bank. But how much
of that $20,000 you paid to the dealer went to pay interest to the
banks from which the DEALER took out loans or mortgages? Did you ever
think of THAT?

Remember that the cost of the car to the dealer isn't just what the
dealer paid the automobile company - Ford, GM, Toyota, whatever - for
the car. The cost to the dealer is what he paid to the car company
PLUS the cost of running his dealership ... which includes the
payments he is probably still making to the bank for the mortgage on
his dealership, and any other loans he might have had to take out!

And that's not the only portion of the car's purchase price going to
the banks. The car company also, in all probability, took out loans
and mortgages to set up its plants and to equip them with competitive
machines also - right? The price at which the car company sells the
car to the dealer would have to recoup all THOSE costs too, a big
chunk of which go to the banks from which the car company took out
loans and mortgages.

And it doesn't end there, either. The car company doesn't actually
MANUFACTURE cars: its ASSEMBLES them, from parts which are
manufactured by other, mostly smaller, companies. The companies which
manufacture the car's parts also have to pay the bankers for THEIR
loans and mortgages, which they took out to set up and equip THEIR
manufacturing plants with competitive machines and tools!

And this goes all the way back to the mining companies which first
dug out the ore and other raw materials from which the car is
eventually made. They, too, had to take out loans from the banks to
stay competitive, right? Heck, even the power companies which
supplied electricity to all of them had to take out loans to set up
their generators plants and distribution grids. There is not a SINGLE
NUT OR BOLT in your car which hasn't been paid for through the
nose ... to the banks!

How much of the $20,000 sticker price of the car do you reckon went
to the banks? Well, at EACH STAGE of the manufacturing process, and
considering the calculations we made above for your house and car, a
large chunk of the selling cost of each of the bits that changed
hands was money which ended up in a bank's coffers! That's at EACH
STAGE of the manufacturing process, mind you - not just at the final
stage.

So it is quite conceivable that out of the $20,000 you paid in cash
to the dealer, at least $10,000, maybe even $15,000, and maybe even
more ... WENT TO THE BANKS! The money that actually went into the
pockets of the people who did the PRODUCTIVE work to bring that car
into existence was probably less than half what you paid to the
dealer, possibly less than a quarter. Possibly, in other words, less
than $5,000.

So paying cash for your car wouldn't make such a huge difference in
the amount of money the banks would have stolen from you. If you had
taken out out a loan for the car you would have paid a total of
$28,352.48 - which is to say, $23,000 more than the car actually cost
to produce ... while if you had paid cash for the car, you could well
have paid as much as $15,000 more than the car actually cost to
produce. The difference is not all that great - $15,000 is still 65%
of $23,000, which is what you would have paid if you HAD taken out
that loan!

And note that this applies to EVERY SINGLE THING you ever bought in
your whole entire life. It doesn't stop with the car and the house:
the banks have had the pleasure of pocketing most of the money you
ever paid for every computer, every cell phone, every beer can, every
movie ticket and every restaurant dinner you ever paid for in your
life ... even if you paid cash for everything, and never went near a
bank in all the days of your life. Possibly half, possibly more than
half, of every dollar you ever spent in your entire life went to
fatten the bankers ... who didn't do a single day's productive work
in their lives!

HOW CAN YOU SIT BACK AND TOLERATE THIS? ARE YOU A MAN OR A MOUSE?

But horrendous as the reality is, there is a silver lining to it.
Every nation has the right to issue its own money, and to prosecute
counterfeiters who issue money without authorisation from the nation!
And you, as a citizen of your (supposedly democratic) nation, have a
right to demand of your nation that it, and it alone, issue money to
its people.

Better still, pretty much every nation nowadays has a Central Bank,
which is supposed to belong to the people of that nation, and to help
them out to the best of its ability. You have a right to demand that
YOUR Central Bank actually do what it is supposed to do: HELP THE
PEOPLE OF YOUR NATION!

Every Central Bank can offer loans to the people of its nation at
ZERO per cent interest. Remember that there is no cost to a Central
Bank when it issues loans, over and above the cost of doing the
paperwork (which is negligible compared with the amount of most
loans, and repayment of which can of course justifiably be included
in the loan contract). The Central Bank, like the private banks
today, can simply write cheques! Each loan can be secured against
some tangible property, the way loans from the private banks are
secured: mortgages against the houses for which they are issued, car
loans against the cars they are issued to buy, etc. So there is NO
RISK WHATSOEVER to the Central Bank if anyone defaults on their loans
at any stage, any more than there is a risk to the private banks who
issue adequately secured loans. The Central Banks, just like the
private banks today, can simply sell the property against which the
loans are secured, and thereby recoup the remainder of the principal.
(And since there is no interest for the Central Banks to recoup, the
process is even more simple than the one the private banks use.)

You may ask, What about loans which are not secured, or not
ADEQUATELY secured? Well, there are two ways to deal with those. One
way is to let the private banks deal with them as they see fit -
charge interest, if they want to, in order to offset the risk. But an
even better way is for the Central Bank, when lending money which is
NOT adequately secured against tangible property, to include an
insurance clause in the terms of the loan. Each such risky loan would
have, as a component of the monthly payments, a portion which insures
the loan against the borrower defaulting on the loan. Of course no
Central Bank in its right mind would issue a loan to a borrower who
did not have a good credit record, so the insurance premium would not
necessarily be high, except perhaps for first-time borrowers, who
probably wouldn't qualify for large loans anyway. As the borrowers
showed over time that they were credit-worthy, the insurance premiums
could drop. So overall, even if the Central Bank got involved in the
issuance of unsecured loans, it is inconceivable that so many of the
loans would be in default that overall the Central Bank would lose
any money - in fact it may even make a little money from this system.

There's absolutely NO REASON why this should not be the case. The
ONLY reason it ISN'T the case today is because nobody demands it!
Well, almost nobody. If all the people of a nation were to demand
that the banks NOT steal from them, and that the nation's Central
Bank do what it is supposed to do, namely help its people, all this
could be here TOMORROW!

SO WHAT ARE YOU WAITING FOR?