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- jsffive, on 01/06/2009, -0/+4 Ron Paul is one of the people in this country who really understands the problem with this country's current financial crisis. He's not very popular with the general public, because he constantly and consistently protests the entitlement culture that we have all grown up under, and the moral hazards that it creates. You can do a web search for "moral hazard" to find out what this term means, if you don't understand, but the basic idea is that people act differently if they believe there's no risk or consequence to their actions.
I'm guilty of it from time to time... God knows, I'm guilty of it. But the difference with me, and most people I know, is that, when I screw up, I take my licks, suffer the consequences, and then I move past it.
Our government is not that way. They are part of what has been called a "dinner party conspiracy". They run in the same circles as the uber wealthy, so when they have questions concerning things like the financial stability of the nation, they inevitably (and to them, REASONABLY) turn to those people for advice.
But the problem is, the uber wealthy, like any of us, wish to "avert risk"... It's a natural instinct. But the result of this, is that those who represent us are getting advice from people who are tainted by this natural instinct. And it ALWAYS results in a bias in THEIR favor.
I'll give you an example:
I have a friend who financed a house ten years ago. The principle for that loan was $90,000. Now, the bank that actually wrote the check for that loan, due to the wonders of our present banking system, only had to have $10,000 in the vault to back up that loan. They merely wrote a cashier's check for $90,000, with the understanding that ANY bank in this country is required by law to accept this check as if it were real money.
On the surface, this seems like a wonderful way for a bank to expand the amount of money that it can loan out.
Here's the rub:
That house, ten years later, is now "valued" at $235,000...
If my friend were to default on that loan, the bank would get the deed to that property... and in the beginning, the bank only had to "risk" $10,000, which was paid back in interest, YEARS ago!
Indeed, if that house were to suddenly devalue down past $90,000, all the way to $10,000, the bank could resell that house, and STILL NEVER LOSE MONEY!
They have all the money, and WE shoulder all the RISK.
To the lay person, this may seem unfair. And before the advent of the Federal Reserve system in 1913, this kind of banking practice was called FRAUD. Nowadays, it's called "fractional reserve banking".
Well, the truth is, the only thing that has changed about this practice is the PERCEPTION. But make no mistake, if the government SANCTIONS MURDER... it's STILL murder. If the government sanctions THEFT, it's still THEFT. Likewise, if the government sanctions FRAUD... it's STILL FRAUD!
And it's utterly irrelevant that the people committing the murder, theft, or fraud will, by government fiat, GET AWAY WITH IT... It's STILL murder, theft, or fraud.
The real question is, when all these "bad loans" start defaulting, do you think that the uber wealthy will care?
Before those houses were built, there was nothing there but an empty plot of land. But now SOMEONE other than the original loanee will acquire those deeds, and all they had to "risk" was ONE NINTH the amount of the original principle!
This is usury. Charging interest on NINE TIMES THE AMOUNT OF MONEY that the bank actually has in the vault, is USURY, no matter how we may define it. Not only is this unfair, but more importantly, it's MATHEMATICALLY FRAUDULENT. And the fact that our government ALLOWS it... is utterly irrelevant.
If we were a truly Christian nation, we would stop this. Hell, if we were truly a MUSLIM NATION, we would stop it, since the Qur'an prohibits usury... In fact, Solomon ALSO warned about it.
The ancients were not stupid. They understood the hazards of allowing usury. Have we come so far, only to forget the lessons of the past?
Please support Ron Paul. He gets it. And so many in our Congress do not.
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