Written by Jeff Nielson Monday, 06 April 2015 15:14
A “0% loan” is a prima facie act of fraud. As a matter of simple arithmetic/logic; in order for any loan to constitute a bona fide transaction, a meaningful (positive) rate of interest must be attached to that debt. Furthermore, readers have previously been presented with the compelling computer model of a trio of Swiss academics, along with large volumes of empirical and anecdotal evidence that all of the Big Banks across the West (and through most of the world) are controlled by a single, corporate entity – previously dubbed the One Bank.
What has not been previously articulated to readers, however, are the implications of having a single, banking monopoly which is the recipient of all our governments’ 0% interest and near-zero interest lending. Indeed, it is this ultra-extreme example of a single, financial behemoth receiving unimaginably large sums of these sham ‘loans’ which best illustrates the inherent fraud of such transactions.
We begin with the fact that any “0% interest loan” which does not have a fixed repayment date attached to it is not a loan, at all. It is a gift. If some financial entity “loaned” you a sum of money at 0% interest, and did not attach a specific repayment date to the (supposed) loan; would you ever repay it? Obviously if some financial entity chose to give us free use of a sum of money, for an indefinite period of time, we would be foolish not to take advantage of such charity.
The problem in a regime of “0% lending”, where all of the major financial institutions are controlled by a single Puppet Master, is that these sham 0% loans are “the gift that keeps on giving”. A simple numerical example will illustrate the horror of this legitimized, institutionalized, financial fraud.
Let us suppose that the One Bank was comprised of only ten Big Banks. Furthermore, let us assume that we were still back in the good, old days of “fractional-reserve banking”, where banking entities were ‘only’ allowed to leverage their lending at a ratio of 10:1. Now we add “0% loans”.
What happens if these ten Big Banks take the “0% loans” they get from the Federal Reserve, and then utilize the magic of fractional-reserve banking to lend to each other, at 0% interest? Each dollar of 0%-lending could be lent, back-and-forth between these financial entities a total of one hundred times, also at “0% interest”, and thus also for free. In other words, each free dollar given to these Big Banks (and thus the One Bank) by the Fed becomes $100 free dollars amongst this crime syndicate as a whole.
Here it must be noted that even if the original “loans” from the Federal Reserve (or Canadian/European central banks were merely “short-term loans”, and were repaid in full that all of the private loans between these Big Banks could remain open-ended, and thus free-and-clear “money”, forever. Even in our hypothetical example; repaying the original loan would only eat-up 1% of all this free money.
Hopefully at this point, the horror of this financial fraud is beginning to sink in, so let’s gradually move from this hypothetical example of systemic financial fraud via “0% loans” and “fractional-reserve banking” into the real world of systemic, financial fraud. The first reality of note is that the Federal Reserve has been cranking-out its funny-money at a rate of roughly $1 trillion per year, via its “quantitative easing”, and other (supposed) “emergency programs”.