I have explained meaning of Hiranyaksha in my first part of this series. In continuation of that series this is second part which is focusing on banking.
Banking: - If we want to understand Banking then first we need to understand mindset of greedy LALA (greedy businessman who lends money). He/She is only interested in how to give loan and earn more and more interest and if said loan is not paid then confiscate everything that person has including his land.
If you want to run your house, business, state or any country then you need money and you must ensure that your expenditure is lesser than your income. If bankers want to flourish then they need to ensure that your expenditure is more than your income as then only somebody will go for loan and bankers are very happy to lend you the money.
If we observe, almost every country, every state, many civil corporations, many businesses and many people are under debt (extremely few exceptions). This is strange as at the same time across globe this is the real fact. This is achieved through corrupt officers and politicians (agents). These agents ensure (or do not understand) that everything is under debt. Ex- Total debt on the government of Maharashtra(one of the state in India) is ~ 300000 Crores (~ 50 billion dollars at current exchange rate) which is equivalent to ~ 30000 rupees per person living in Maharashtra. Agents ensure that whatever area they are governing is under debt and in return Banks give them safe heaven for keeping their black money which they gather through corruption. Come what may banks do not declare their customer info to anyone. If this agent dies or get caught in corruption then all his money is free gift to bank and banks get benefitted both ways.
In case of common people, most of them are in debt – Home loans, car loans, Personal loan, Consumer loan, loan against gold etc.. If we would have lived in small villages then nobody would have paid so much money for housing, cars etc. Apart from oil lobby, biggest beneficiary of bigger cities is banking lobby. Bigger the city then more expensive are homes (of course there are other factors affecting as well like price manipulation and printing paper currencies) then people need more loans and then they are slaves for their life time paying regular money in the form of interest. Decades back if somebody had a loan then people used to avoid dealing with that person, they used to face trouble for their marriage as nobody used to prefer a son in law with lot of debt. This banking lobby has positioned loan in such a way that today if your loan is passed/sanctioned then people distribute sweets and celebrate their new homes like anything. Today bankers are ready to mortgage everything and if you fail to pay then the thing which you mortgaged belongs to banks. You will observe that politicians talk many times “We need more houses to drive economy”. In reality more and more people get trapped in debt and only banking lobby flourishes. If you lose your job or default on your loan then banks will seize your house/property which you had mortgaged and bottom line is the piece of land on which your house was there is now owned by bank.
But how come states, countries are in debts? An agent is the answer. For various states these agents keep on spending recklessly and ensure that states expenditure is way high than its income. Any state and country spends/loses primarily more in 4 things 1) Oil 2) Wars 3) Any welfare schemes 4) Corruption
1) Oil – If countries oil demand is more then they will spend more money on that. Here agents play very beautifully. They keep extreme liberal policy for Vehicles and don’t provide mass transport system. Once more and more vehicles come on road then job is done. Ex- In India, after having such liberal policy for selling Cars, 2 wheelers etc (public transport is destroyed), previous PM after his 8-9 years of his tenure said “I am worried about India’s Oil imports”. With such set up countries keep on buying more and more oil. This ensures that your expenditure is more. You just compare these big oil companies’ profits – One company’s 12 month’s profit is equal to entire one big states budget.
2) Wars – If any war is waged on your country then country will spend lot of money on the wars (weapons industry also benefits from this). For war there must be animosity between various countries, religions, race. Agents execute this job perfectly. Ex- Before 65 years there was not a single enemy around India. If you see first Pakistan was created then agents slowly started making China, Sri lanka etc hostile towards India. More the enemies then wars will easily happen then country spends more and its fiscal deficit increases. Every attack by America in Middle East has pushed America into more and more debts. Just look at the defense & oil import budgets of most of the countries and we realize that after we pay taxes who is swallowing those. Country will have to spend more on defense as there are enemies around you or Agents will portray a picture like there is threat to security of one’s own country and how it is beneficial to spend more on defense.
3) If there are no enemies around you and chances of wars are slim (Ex- Europe) then there is different strategy. Spend on welfare schemes where people think government is helping us but in reality they are making your country go bankrupt. Free housing, weekly some amount if you don’t have job , free food schemes, give waiver on debt etc. In last decade or so even in less developed countries also you can see these freebies which push that country more and more into debt.
4) Corruption – If there are politicians and officers who are corrupt then they will empty your vault and keep it in these banks. Your state/country will lose big amount of money in it. Today we can see that corruption is spreading so speedily everywhere and affecting all of us.
Once your countries’ expenditure is more than its income then somebody needs to finance it. Without money Government will not be able to function. In such scenario banking guys are happy to help. For generating money, Govt may issue bonds which banking guys will buy or bank may will lend directly. Today almost half of Europe is on the verge of bankruptcy and handful of lenders are deciding about them. Today to benefit these oil and banking lobbies everywhere economics has shifted from Farming, Dairy to Housing and Oil. The way media and politicians portray the picture is like if house prices are going up then economy is booming which appears ridiculous.
But question arises from where these banks get so much money to lend and let us look at our so called Money
Money Printing: - Paper based currency notes are printed by central banks of that country and signed by respective countries authorities (ex – Governor of central bank) and then many of us call it as money. Most of us think that respective authorities keep somewhere Gold and equivalent amount of paper is printed. This is the most misunderstood part. In reality nobody is keeping anything anywhere and it is just printing machines are printing. In fact US had declared long back that their currency is no more gold backed. Today this dollar is reserve currency of world and whoever is dealing in dollar they are also forced to print their respective paper. Ex – If any indian IT company does work for US based client and generates 1 million worth of dollars then this company while bringing back money into India will have to convert these dollars into rupees and will approach these banks/central bank which will just print Indian rupee or give you already printed rupee. Just notice around you and you will observe that all the things in nature are as it is there but paper notes required for purchasing those are increasing. Means more and more notes are being printed and imagine if few people corner chunk of the printed money and remaining is left for the rest of the people then it will be disaster. These handful of people will have power to buy each and everything. These handful of people are these banking guys. US has printed billions and billions of dollars and most of these dollars have flown into various banks and today these banks decide what to do about any country. Just open your eyes and see what is written on your bank note. This bank note is called as legal tender. Governor is promising us something and signing on it. What is this promise? Ex - “I PROMISE TO PAY THE BEARER THE SUM OF ONE HUNDRED RUPEES”. Means if I approach governor with this note then he is promising me to pay 100 rupees in exchange of this note. He will give me back this same note. This is the trick. You will get nothing tangible out of this. All tangible things like Gold are swallowed by these bankers. When paper based currencies were introduced then it was positioned as it is alternative to Gold and you will get back your Gold if you produce back this note and this is one of the reason it is called as legal tender. It is said that before independence of India almost ~ 900 ships of Gold was taken out of India. If governor would have written as “I PROMISE TO PAY THE BEARER 0.1 GRAM OF GOLD” then it would have been different thing. Moreover it is appearing that this paper currency is defying basic law of mathematics. Ex – When we say I have 5 books then we can count them, we do not write 5 on one book and say that they are 5. In case of paper currency, on the same note 1,2,5,10,20,50,100,500,1000 is written, only change is color and photos on the note. With this arrangement they can keep printing money, inflation will keep on rising and whoever will corner this paper he will control and corner the economy.
If you print this paper more and more, inflation will keep going up in your country(Ex-Few years back due to reckless printing, inflation was in seven digits in Zimbabwe). But if you print more and more and you export this paper to some other country (For goods or services) then inflation in your country is also stable and you have free lunch everyday. Make your economy import oriented then others become dependent on you and you will export this paper as well. This is exactly how dollar is ruling the world. More and more dollars are printed and exported to other countries. Question arises despite of such high printing how come exchange rate of dollar is still same. In Forex market strength of currencies is determined by demand for that particular currency like simple demand and supply equation. This is one more place where oil and corruption works. For purchasing oil, currently there is only one currency in which you can buy and that is dollar. If you have more oil demand in your country then you will need more dollars for purchasing Oil or if Oil becomes more expensive then you will need more dollars. So simple equation arises more currency you print then more must be the demand for oil or it must be more expensive. This will ensure that demand for dollars will also be more. Another aspect is when people in your own country do the corruption, convert the same into dollars and stash these dollars into these banks. Then also demand for dollar will go up.
As a common man we shall stay away from all types of loans, never sell your farmland and cattle as they are the core of any economy. Banking guys put money into different businesses and farming gets sidelined and people abandon farming and sell it. Today in India ~ 70% farmers want to leave farming. If people move more and more towards dollar sponsored businesses then day will come when people will fight for their groceries.
Henry ford once said “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning”.
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