Capitalism should be about creating things of value and not financial deception / by kevin murray

To a very large extent, most people do not have an issue with a company selling a product which is sold at a price point, that allows that company to make a reasonable profit upon it; and to the extent that competition as well as what the market will bear exerts influence upon such things, this is all well and good, in the overall process and workings of capitalism.

 

That is to say, capitalism at its finest, is the creation of goods and services that the public, at large, has a desire to utilize or own, in which, the pricing and availability of such, takes into account, that ultimately capitalism is a basically about trading those goods, aided by or through the use of the currency of the realm, of which the purchaser  of such has a need or desire for, and believes further to have been fairly bargained for, because, ideally, the capitalistic system, is free, open, and competitive.

 

Unfortunately, capitalism can be perverted in a manner and way, in which, it really isn't always about creating products and services that consumers have a desire or need for, but rather is created in a manner, in which the sole purpose of a given business is really about just making profit and profit alone; and further is about making that money, specifically, without actually creating anything other than financial chicanery, that allows such entities to basically make money out of nothing.

 

For instance, a case in point is the structure of the banking system within America.  The way that a given bank should be structured is that, customers, deposit money into those banks, and a specific and prudent portion of those deposits, are thereupon lent out to worthy customers at a loan rate that takes into account, safety, the return of capital, and a fair profit for the bank.  In actuality, though, a significant amount of bank loans, are done by those banks, which somehow have seen written into their rules and regulations, that they need to hold just a fractional portion of those deposits made, perhaps as low as 10 percent or even 5 or 3 percent, in ready deposits at the bank, in which the balance of that money so deposited, can then be loaned out.  Further, once that money is loaned out to a given business or individual, that business or individual can deposit that loaned money into another banking institution, in which once again, only a small portion of that money so deposited must be kept within the bank reserves, and the balance of that money, is available thereby to be loaned out, and this can continue on for many iterations. 

 

Essentially, the fractional reserve banking system, as implemented, creates money out of nothing, and then charges an interest rate and fees for that money so being loaned out, in which, in essence, the banking institutions make profit out of absolutely nothing, by simply being the authorized representative of the state that permits them to make this money, and thereby takes away through interest and fees, money from those that have earned it, fairly.  This thus means, what it appears to mean, that our largest banks, make billions upon billions of dollars upon the back of the working man when times are good, and when things go horribly wrong, they are considered to be too big to fail, and therefore the taxpayers bail them out, thereby suffering the ill effects of systemic financial deception.