A banking license is a license to print money and rob. As Larry Hannigan points out, on the original deposit which cost him 3% to attract, Fabian adhering to the legal limit extends let us say nine times as much credit as there is on deposit and charges 5% for the loans. So he will be making 9 times 5% less 3% is 42% profit. But that is by far not the end of the story: Instead of calculating the interest on a yearly basis, the Bank is now charging interest on a monthly basis, called compounded interest. The bank furthermore insists that with each loan facility a certain amount in cash stays deposited with the bank. This increase in deposits again in turn widens the bank's total lending capacity. Guarantees for loans have to be provided, due diligence to be made, special insurance taken up and lawyers expenses covered. Wherever they can the Banks extract money. Credit cards three months overdue pay 18% interest. Long live usury! Credit in circulation in turn creates new business on top, ad infinitum. Credit layer upon credit layer upon credit layer. The State, circumventing competition with private industry for loans, colluded with the Banks and gave the Banks the right to apply a different ruler in regard to government debt paper. For its own financial requirements the State waived the Banks' 8% capital to loan cover, obligatory for the private sector. When the REITS , the real estate investment trusts collapsed at the end of the seventies many banks should have gone under, top heavy with near worthless real estate in their books. To salvage the banking establishment the FED closed its eyes, and reduced the Banks' capital to loan cover to the extent that at one stage a one million Dollar mortgage could be carried by the bank by only U$ 6.000.- in equity capital. September 1989 the US commercial Banks held U$ 120 billion in dubious mortgage backed securities!

Over the last few decades the Banks have found so many loopholes in the capital to loan ratio rule that it has become an utter farce. Interbank credit lines, overnight positions, off-balance sheet financing, monetizing debt, standby agreements, special "non-cover clauses" and "special reserves", carry-trades, to name but a few, are all used for "credit creation by other means".

Today's money is not only fiat money. When the banks began monetizing debt it, money became also negative. It is negative money on which the flimsy high-rise credit pyramid of world prosperity is built. And negative money makes negative people!

There is no way that even top class international auditors can honestly certify the balance sheets of the multinational banking conglomerates. Let alone that the FED and Greenspan still have any idea of what really is going on and still exert influence on monetary affairs. E.g. what could now prevent the global Bankers from issuing reciprocal credit in US Dollars, Yen, Euros off-shore ad infinitum out of thin air between themselves, like Polish merchants used to?

Financial refinements of derivatives, varieties of options, futures, indexation, floating, libor or pibor rates, using straddling, spread, margins, convertibles, splits, mergers, go-go thrifts, rent-a rating, buy backs, IPOs, leveraged takeovers, poison pills, cross share holdings, inter-linkage or whatever, impenetrable to outsiders, decorate Rococo Finance.

Totalitarian Capitalism rules supreme by withholding and usurping all possible real assets which could constitute competition to its own fiat finances or serve as alternative anchors of financial independence, with gold on the top of the list.

Totalitarian Capitalism, run by only a handful of people, now controls nearly all the world's currencies, credit creation, the financial, precious metal and commodity markets, the banking establishment, the Central Banks included, the IMF, the World Bank, BIS, the Investment and Hedge Funds, enterprise, the media, elections and the State. It has done away with most of free enterprise, free competition and free markets. See: "The Myth of Free Markets" by the same author at: http://www.gold eagle.com/editorials_99schicht061499.html It controls your and my income and savings and life-style. The only thing Totalitarian Capitalism does not control as yet is the Internet. But beware!

Let us go back in time one hundred years and give enterprise and the Banks an equal start. How for heavens sake could and can enterprise compete with the pampered Banks for their share of the GNP when the Banks have such a head start with guaranteed profits of 42% p.a. as in Fabian's case and probably much more when all additional advantages described above are taken into account? Last but not least, topping off the already heavy disequilibrium still comes enterprise's costly outside financing with its multiple plus expenses of supplementary insurance and lawyers, forced on to cash-stripped enterprise by the ever growing tax burden. Loans which, as an ultimate insult have to come from the same Banks, enterprise has to compete with. And we are here not even taking into account that the State does not let the Banks go broke and in case of trouble stands ever ready to rescue the Banks with tax payers money. Is it a great wonder that at the start of the 21st Century the Banks own almost everything and what they do not own they corrupt? The Banks' overwhelming advantage to grow has been a fait accompli from the beginning and will remain so as long as the ground rules will not have been radically changed or overthrown!

The totally wrong footed bank and currency legislation and excessive taxation are at the very root of this evil dislocation of State and Banking power.

Ever increasing taxation and force-fed social obligations have made it:
- impossible for the entrepreneur, especially the family entrepreneur, to maintain his independence and enslaved him to the mercy of the banks,
- has killed all grassroots entrepreneurial growth,
- has driven many an enterprise off-shore or into the gray markets,
- caused the breakup of the mainstay of society, the family,
- made millions of people eternal credit slaves.

There are two kinds of society:

- the negative society where people are classified and told what to do, slaving away in an eternal debt trap, slowly stripped from all private possessions, security and responsibility, just nameless numbers. And on the other end: the positive, the free society where people proudly toil for their own and family's future, make their own decisions, carry responsibility and have dignity.

Of the main seven underlying evils mentioned, interest is the worst offender. Interest compensation till the 14th Century was prohibited for Christians and still is for Muslims as laid down in the Sharia, which by the way also forbids business without underlying assets! It must have been very wise men who recognized interest's dangerous consequences. Interest affects the character of both the taker and the extender of credit. Over time Interest leads to the convergence and concentration of capital into only a few hands at the top. Interest makes slaves, Interest concentrates power and Interest is aggressive. The non-stop credit pushing by the Banks to expand their credit empires is proof of it. And when no credit is needed, it is artificially being made so by inflating the victim first and than pulling the rug out from under him. It has happened and happens to countries, to people, to markets (Nasdaq?), to commodities, to currencies to anybody and anything that could constitute competition. Monetary Imperialism, a degenerated Capitalism, that is what we are confronted with at this very moment at home as well as abroad. And we want to know the men behind all this! http://www.numismaticrareuscoin.com/nbn/banking.html

Although for a start, it is not simply a question of reestablishing free markets and in particular the gold market with which we are confronted, it is the absolute necessity of replacing some totally wrongly conceived foundations of our financial structure if the world wishes to stay free. The chances for such happening peacefully are slim so to put it in a nutshell: we will soon be confronted with a major upheaval not only financial but social political.

- Let us go back to positive money with intrinsic value, serving the people not dominating them. See "Crystal Ball 2000" last part, "Cyber Money" at: http://www.gold-eagle.com/editorials_00schicht011800.html

- Let us go back to the wisdom of antiquity and get rid of the curse of interest. Aggressiveness and power plays do not fit any longer into a fully integrated planet. Physical slavery was abolished one hundred years ago, now is the turn for financial slavery to be abolished.

- Let us scrap the once-only taxation provision for linked corporations and put an end to the preferential status of trusts and foundations to brake the back of spider web finance.

- Let us terminate the preferential charters for banking and close the Central Banks. One dollar in shall be one dollar out. And no longer a situation where a few obscure Grandees in control of the currency, the credit business and interest rates, can hold the whole world to ransom.

-And last but not least let us throw out all this business of anonymity. Corporations, Governments and all public and private companies should be obliged to publish their structure, their finances and relationships on the WWW. Our 21st Century Society exhorts openness and transparency in all affairs of man and no more cloak and dagger politics.

These are not wild idealistic dreams, but iron necessities for humanity to survive. The Power of a free Internet will help us to achieve them. Let us all help keep it free!

Downloaded from the CWW, Cosmic Wide Web, Lake Chapala March 2000

Note: It is most fascinating to see the gold-eagle forum with its multiple input, meditation, consideration and evaluation develop into an early cell of a future Internet brain! One little thought seeded at the right place at the right time might grow and grow.

Lake Chapala, Mexico
22 April 2000
Hans Schicht