Bank Robbers
There are two types of bank robbers. One type robs the bank from the outside, the other robs banks from the inside. All bankers steal your wealth from the inside - legally.
One of the more benign ways that banks steal your money is via the "fractional-reserve system".
For example, if you put $10 in your savings and the bank lends out $100 based on the ability to lend out $10 for every $1 in deposits it holds, that causes inflation. And inflation robs your savings of purchasing power. On top of that, the bank pays you 2 percent on your $10 and collects up to 20 percent or more on the $100 it lends out.
This is one way your banker robs your wealth from inside the bank.
Goldman just took bank robbery to a more sophisticated level, and now Germany, England, and pension funds are upset.
Just as the SEC and courts found no wrong doing with AIG, I doubt much if anything will be done about Goldman. A few lower-level executives may be fired and punished, but once politicians, the press, and the public tire of the story, the banks will be back to business as usual.
So, is Goldman guilty? It depends on the rules you play by.
According to banking rules, Goldman was doing what it always does, giving their customers what they want. In this case, some customers wanted to bet long (that the mortgages would pay off) and others wanted to be short (that the mortgages would fail).
This is why it's important to be familiar with the New Rules of Money. Once you know the old and new rules of money, you can decide which rules of money you will play by.
One of the more benign ways that banks steal your money is via the "fractional-reserve system".
For example, if you put $10 in your savings and the bank lends out $100 based on the ability to lend out $10 for every $1 in deposits it holds, that causes inflation. And inflation robs your savings of purchasing power. On top of that, the bank pays you 2 percent on your $10 and collects up to 20 percent or more on the $100 it lends out.
This is one way your banker robs your wealth from inside the bank.
Goldman just took bank robbery to a more sophisticated level, and now Germany, England, and pension funds are upset.
Just as the SEC and courts found no wrong doing with AIG, I doubt much if anything will be done about Goldman. A few lower-level executives may be fired and punished, but once politicians, the press, and the public tire of the story, the banks will be back to business as usual.
So, is Goldman guilty? It depends on the rules you play by.
According to banking rules, Goldman was doing what it always does, giving their customers what they want. In this case, some customers wanted to bet long (that the mortgages would pay off) and others wanted to be short (that the mortgages would fail).
This is why it's important to be familiar with the New Rules of Money. Once you know the old and new rules of money, you can decide which rules of money you will play by.
