In Today’s Fiat Money Financial System, ‘The House’ Always Wins

Monday, April 24, 2017
By Paul Martin

by Economic Prism’s MN Gordon, via,
Apr 24, 2017

The Raw Deal
We stepped out on our front stoop Wednesday morning and paused to take it all in. The sky was at its darkest hour just before dawn. The air was crisp. There was a soft coastal fog. The faint light of several stars that likely burned out millennia ago danced just above the glow of the street lights.

After a brief moment, we locked the door behind us and got into our car. Springtime southern California mornings are exquisitely pleasant. The early morning drive to downtown Los Angeles, on the other hand, is exquisitely painful.

Nonetheless, we make the best of it like we make the best of a trip to the dentist – or a visit with our accountant. If anything, it affords us the opportunity to do something most people rarely do. In particular, it gives us time to think. Before we knew it we’d reached our destination. But not before uncovering half dozen unrectified incongruities. The sorts of things that are futile to piece together.

One thing that stuck in our craw like a broken chicken bone is the raw deal main street depositors and lenders get from credit unions and commercial banks. In short, the credit system is tilted against them. The rules of the game favor the bankers.

Extreme Maltreatment
Perhaps the rules of the game have always favored the bankers. Loaning out deposits at a higher interest rate than the yield paid is cornerstone to fractional reserve banking. However, the extreme maltreatment of individual depositors and borrowers that has persisted following the 2008 credit crisis is a downright disgrace. Where to begin?

The prime rate, if you recall, is the benchmark used by banks to set rates on consumer loans. These consumer loans include credit cards, auto loans, and home equity loans among others. Obviously, the prime rate is reserved for only the most qualified clients. These are primarily corporations. Not individual customers. Certainly, they’re not your typical credit card user.

The Rest…HERE

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