Bank Spreads

Bank Spreads

OP-ED

         Today banks make most of their money from TWO “SPREADS”: (1) interest on money transferred from one customer to another waiting to be made “available”, (2) interest on the $33,000 they get to loan out for every $1,000 deposited, paying savers 2% and charging borrowers 5%. Neither will be allowed under The Valentine Constitution. To generate the other $32,000 dollars, banks use the leverage of our Federal Reserve and Treasury backed by our nation’s credit guaranteed by the unassailable fact that each and every year Americans will pay $10 trillion in total taxes!, an economic phenomenon unequaled on earth. But only Wall Street and Banks get to use the leverage. What if we got to use that leverage? We’re all borrowing and saving and earning each other’s money, and leveraging the collective pool of money contributed by taxpayers, savers, borrowers, the insured and so on. With insurance we all cover for each other to spread the cost of the occasional accident out over the years between accidents (and are getting ripped off there too). Between savings and collateral, banks should be able to cover the little remaining risk from the interest they make off their loans. Why give Wall Street kings and queens the financial power we make possible? Because the full faith and credit of the USA has been sold by politicians for the price of a campaign contribution. No rocket science is going on here, just bond markets and corruption.

         The bank is a middleman lending the saver’s money to the borrower. All the bank does is enter the borrower’s info into a program which accepts or rejects the loan and sets the rate. Under The Valentine Constitution the saver will be able to do that, at home, online, in their single account, at the click of a button, since the info will already be there under the Citizen’s sole control. Our public utility bank would cover costs out of the 5% transaction tax, our only tax. The average taxpayer-saver and USA’s credit now covers the risk portion of loans (not covered by downpayment and collateral), as well as all unsecured credit, like credit cards and stock derivatives. Why does the taxpayer-saver get penalized for making the loan and credit world go ‘round and ‘round? Somebody’s using somebody, and I think we all know who it is.

         The Valentine Constitution eliminates these and other money games and replaces them with a simple, fair, free market, public utility bank. Doing simple, old fashioned banking only, the public utility banking system allows our Citizens to use the full faith and credit of the US to their advantage rather than giving it away to Wall Street banks and derivative gamblers who use it to crash our economy and then make us bail them out. All sorts of games and rip offs are going on using our savings, our pensions, our taxes and our assets. And most people don’t have a clue, because instead of being IN the game, they’re AT the game! Valentine skipped all the games, and wrote a Constitution instead. The Valentine Constitution will give savers a far higher return on their savings, commensurate with the financial activity their savings generate. Savers will then be encouraged to save more and make more without being at risk.

         Saving is the backbone of every society, but no one does it anymore because the interest rate is next to zero! That’s our government pressuring us to invest rather than save, the opposite of what it should be doing. But our politicians are controlled by the Wall Street elite who finance their campaigns. Our investments on Wall Street should capitalize businesses, foster job growth at home, produce a regular dividend, and protect our investment principal. Savers should be funding long term industry which in turn supplies dividends and jobs. That’s capitalism. Instead now we have outsourcing, planned obsolescence, multinational monopoly disloyalty, high speed and derivative trading and stock swaps, banks investing and insuring stock trades, and the leveraging of already leveraged risk! The Valentine Constitution prohibits Wall Street from using our tax base and our hard earned savings as collateral to finance their gambling casino and as juice to place bets and lose our pensions and IRAs when their bets don’t pay off with no downside for them. Ratifying The Valentine Constitution fixes it all.