Guest Post by Simon Black
This morning after my plane landed from Bangkok, I was having breakfast in the business lounge in Sydney and glanced at the local paper, The Australian.
The front-page headline told the story of yet another banking scandal:
“Cartel case nets six bankers”
The article was about how six prominent investment bankers in Australia colluded to defraud investors.
This comes the day after Australia’s financial regulator hit Commonwealth Bank with an AUD $700 million (~USD $525 million) fine for aiding criminal organizations to launder money.
And earlier this week the United States government slammed French bank Société Générale with a $1 billion fine for rigging interest rates and bribing Libyan government officials.
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I’ll pause and acknowledge the obvious– banks are constantly screwing their consumers and violating the public trust.
That much is a given.
It’s been proven time and time again that banks lie, cheat, steal, and otherwise do whatever they have to do to make more money at our expense.
They manipulate markets. They make wild bets with their customers’ savings. They engage in accounting tricks to make themselves appear financially healthier than they really are.
And if that weren’t enough, the banks have the audacity to treat us, the customers, as if we’re the criminals.
Completely normal, innocent bank transactions are viewed with suspicion and heavily scrutinized.
And if you’re adventurous enough to test this point, try withdrawing a few thousand dollars of your own money in cash and see if you feel like a valued customer.
Even for banks that behave with a modicum of decency, there’s still the simple fact that an average deposit account pays a laughable, minuscule amount of interest.
JP Morgan, Bank of America, and Wells Fargo all currently offer rates between 0.01% and 0.04% for checking and savings accounts.
Sure, interest rates in general are obviously low. But they’re no longer zero– the Federal Reserve has been gradually raising rates over the last 2 ½ years. Even short-term Treasury Bills pay nearly 2% on an annual basis.
Yet despite these steady increases, the biggest banks haven’t budged on how much interest they pay to their depositors.
In light of all this, there’s literally no reason to leave the bulk of your savings in a bank, especially with so many alternatives for savings and lending, including short-term bonds, blockchain, and Peer-to-Peer loan websites.
Yet in some sort of bizarre financial Stockholm Syndrome, most people still keep the vast majority of their savings in the very same banks who have a history of defrauding them.
This is pretty strange behavior. These banks are stealing your money, whether directly (Wells Fargo) or indirectly (in the case of the interest rate mismatch).
It’s not like this is some closely-guarded secret either. It’s all over the news, and the banks have admitted their guilt.
So people who don’t make any financial changes are deliberately choosing their captors over common sense.
A couple of thoughts–
When I read articles that quote stats about how little savings that Americans have and ill-prepared for retirement, I wonder if they are not a bit misleading. After all, I have a modicum for my retirement which is diversified into several places–but I would appear to be a ZERO savings if one simply used my bank “savings account” as the metric.
Secondly, I just finished the chapter on banking by a recent author who posted book excerpts here, “How You Got Screwed”—the author makes a great point in that when these banks are caught, 99% of the time nobody is prosecuted criminally. Also, the fines the bank(s) are forced to pay are a scant amount compared to the billions of dollars they profit, loan and leverage from their ill-gotten gains. Essentially, if you are a bank, crime DOES pay.
How many will it take? ONE.
The one that finally makes the whole stinking globalist Ponzi scheme collapse.
Nothing short of that will change a thing.
Then, after the sheep have had their fill of rope and lamp posts something new will arise.
Whether it’s “new boss just like the old boss” remains to be seen.
Let’s get this shit straight. The Commonwealth Bank was charged and fined as he said, but the helping launder money bit is a little exaggerated.
It was due to failure to report transactions in excess of $10,000, which by law they have to do. Same type laws exist in the US.
But why the fuck do banks have to report on transactions I make to the government? Why does the government get my name if I make a $10,000 withdrawal? What right do they have to that info? It is my fucking business, and no one else’s. My banking should be 100% confidential.
The govts have made banks part of the Big Brother spy network. It is horseshit, it is wrong, and to imply that the banks were evil in not providing the info is ridiculous. It is the law, but it should not be.
Re the cartel, I am not 100% up on the info, but it is alleged that some investment bankers might have withheld stock for their own purchase when it was supposed to go out on public offer. My suspicion is that this will not make it to court/end up in trial. That is just my gut feel, as it will be a very complex thing to pursue and prosecute. They will have to prove collusion, prove damage occurred, etc. It will be tough to do, I expect.
You have it backwards. The bankers/banks own the politicians. It’s just a charade that governments control the banks.
How does that address my point that no one should get info on what I do or do not do with my money? You think the fucking banks put that requirement in? Hell no. That was the damn govt, and it is happening world-wide.
You are completely naive.
These regulations exist due to anti-terror and anti-drug money laundering laws. The specific requirement in the US is the SAR: Suspicious Activity Report.
Bankers are, by law pretty much in any 1st world nation, required to KYC (Know Your Customer). This doesn’t mean just your name, address and account number. It means they are supposed to know what your business is, what your banking activity typically is, who your relatives are, etc etc
When activity occurs which is outside of the normal profile, a SAR is supposed to be filed. In addition, there are specific trigger points: $10K or more in a single cash transaction is one, but so are $2K or more transactions in volume.
Money launderers, people paying bribes, outright criminals, terrorists etc are the people intended to be noticed by this.
Bankster behavior in this area is more about neglect rather than active criminality, although active criminality exists too – witness the Swiss banker’s active collusion to help US and European clients avoid taxes.
Disagree with the above use cases? Well, go change the laws.
A million scandals could not change the banking system in any meaningful way. Only an armed uprising could do that.
All these “scandals” mean nothing to the average person with no comprehension of what is going on.
They listen to the media and their favorite politicians talk about how the banks were saved, they are grateful and supportive.
The fed is too late and unprepared for when the next recession hits in the next few years or so. Will Americans look back at fed practices or banking scandals and light the torches?
Hell no, the media will tell them who to blame. Trump, republicans, white men, conservatives, anyone with a bit more than they have.
If you don’t like banks, don’t do business with them.