Don't Bank On It!Don't bank on it (modern banking system)
The essence of banking was once explained by Sir Josiah Stamp, a former president of the Bank of England:
"The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in inequity and born in sin... Bankers own the earth. Take it away from them but leave them the power to create money, and, with a flick of a pen, they will create enough money to buy it back again... Take this great power away from them, or if you want to continue to be the slaves of bankers and pay the cost of your own slavery, then let bankers continue to create money and control credit."
The last great abuse of US banking system caused the depression of the 1930's. Today's abuses may cause another. Current S&L and bank scandals illustrate the on-going relationships between banks, lawyers, politicians, and government agencies (look at the current BCCI bank scandal, involving lawyer Clark Clifford, politician Jimmy Carter, the Federal Reserve, the FDIC, and even the CIA). These scandals are the direct result of years of law-breaking by an alliance of bankers and lawyers using their influence and money to corrupt the political process and rob the public. (Think you're not being robbed? Guess who's going to pay the bill for the excesses of the S&L's, US-taxpayer? You are.)
The systematic robbery of productive individuals by parasitic bankers and lawyers is not a recent phenomenon. This abuse is a human tradition that predates the Bible and spread from Europe to America despite early colonial prohibitions.
When the first United States Bank was chartered by Congress in 1790, there were only three state banks in existence. At one time, banks were prohibited by law in most states because many of the early settlers were all too familiar with the practices of the European goldsmith banks.
Goldsmith banks were safe-houses used to store client's gold. In exchange for the deposited gold, customers were issued notes (paper money) which were redeemable in gold. The goldsmith bankers quickly succumbed to the temptation to issue "extra" notes, (unbacked by gold). Why? Because the "extra" notes enriched the bankers by allowing them to buy property with notes for gold that they did not own, gold that did not even exist.
Colonists knew that bankers occasionally printed too much paper money, found themselves over-leveraged, and caused a "run on the bank". If the bankers lacked sufficient gold to meet the demand, the paper money became worthless and common citizens left holding the paper were ruined. Although over-leveraged bankers were sometime hung, the bankers continued printing extra money to increase their fortunes at the expense of the productive members of society. (The practice continues to this day, and offers "sweetheart" loans to bank insiders, and even provides the foundation for deficit spending and US federal government's unbridled growth.)