Share on Google Plus Share on Twitter 2 Share on Facebook 6 Share on LinkedIn Share on PInterest Share on Fark! Share on Reddit Share on StumbleUpon Tell A Friend (8 Shares)  

Printer Friendly Page Save As Favorite View Favorites (# of views)   3 comments
OpEdNews Op Eds

Banks Are Obsolete: The Entire Parasitic Sector Can Be Eliminated

By       Message Charles Hugh Smith     Permalink
      (Page 1 of 2 pages)
Related Topic(s): ; ; ; ; ; ; , Add Tags Add to My Group(s)

Inspiring 2   Must Read 1   Well Said 1  
View Ratings | Rate It

opednews.com

Author 92382
- Advertisement -

Reprinted from http://www.oftwominds.com/blogfeb14/tech-risk2-14.html

What else can we do with the $1.25 trillion we'll save by eliminating these obsolete financial middleman parasites? A lot.

- Advertisement -

Technology has leapfrogged the banking sector, rendering it as obsolete as buggy whips. So why are we devoting 9% of our economy to an obsolete parasite? Financial sector profits now total a staggering 4.5% of GDP (gross domestic product), while the expenses generated by financial churning account for another 4.5% of the economy.


Financial Profits vs. Debt/GDP
(Image by Market Daily Briefing)
  Permission   Details   DMCA

chart courtesy of Market Daily Briefing


- Advertisement -

Software and existing non-Wall Street/too-big-to-fail institutions could replace the entire Wall Street/banking sector and drop costs to .5% of GDP, saving us 8+% of our GDP ($1.25 trillion) that is currently siphoned off by parasitic middlemen. The banking sector is Exhibit A in the Middleman-Skimming Economy (February 11, 2014).

The pull of habit and propaganda is so strong that most people haven't even recognized that software and the Web can replace the entire financial/banking sector for a fraction of the cost of the current parasitic system, a system that (as we all know) has captured the regulatory and governance machinery of the central state, making a mockery of democracy.

The benefits of eliminating the financial/banking sector are immense and far-reaching.

What exactly do banks do? Banks perform these basic functions:

1. They hold depositors' money.

2. They act as a clearing house for payments, transferring funds from payor to payee.

3. They issue loans on a fractional reserve basis, i.e. a few dollars in cash deposits supports $100 in loans.

- Advertisement -

4. They originate and trade derivatives, run high-speed trading desks, operate various money-laundering and embezzlement schemes, influence elected officials with lobbying and campaign contributions and subvert both free market capitalism and democracy at every turn.

This entire parasitic middleman sector could be replaced with automated digital clearing houses and crowdfunded or non-bank loans. Why do we need banks to pay bills online? We don't; any clearing house could charge a small fee for the transaction.

Why do we need banks when loans can be crowdfunded? If we can invest money in start-ups via Kickstarter, Indiegogo, RocketHub, AngelList, etc., why can't we own a piece of someone's auto loan or home mortgage?

The web and software now enable the elimination of the entire middleman skimming operation of banking. Those with capital can invest that capital directly in loans that the investors choose. Risk is distributed throughout the system, and the process of verifying credit scores, income, valuations, assets, and so on--the building blocks of risk assessment and a market for debt and cash--can also be automated.

Next Page  1  |  2

 

- Advertisement -

Inspiring 2   Must Read 1   Well Said 1  
View Ratings | Rate It

http://oftwominds.com/

Charles Smith moved to Hawaii at 15, entering Lanai High School as one of only three Anglos. By marriage or birth his immediate family includes Mexican-American, African-American, Asian-American, and Caucasian bloodlines. He's put his degree (more...)
 

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon



Go To Commenting
/* The Petition Site */
The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Writers Guidelines

Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
- Advertisement -

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Banks Are Obsolete: The Entire Parasitic Sector Can Be Eliminated