Search Results for: hana

… to bank the poor must recognize that centralized, national, and large banks won a decisive victory over small community banks. Alexander Hamilton rightly believed that government-controlled central banking was essential to coordinating a modern economy. But Thomas Jefferson was also right that permitting banking power to accumulate in the hands of the few does so at the expense of the many. The dilemma of living in a Hamiltonian banking world without addressing the Jeffersonian nightmare of inequality has led to the current crisis of the unbanked. But there is a Hamiltonian solution to Jeffersonian fears: a public option in …

… rather than the market value. It wasn’t long before appraisers were receiving handsome fees for appraisals that were, to say the least, unrealistic. But that was not fraud, it was the intent of the regulators. The amount by which the appraisal exceeded the market value was defined as “appraised equity” and was counted the same as capital. Since the S&Ls were required to have $1 in capital for every $33 held in deposits, an appraisal that exceeded market value by $1 million could be used to pyramid $33 million in deposits from Wall Street brokerage houses. And …

… be allowed to fold because it provided “essential” banking services to the community. That was justified on two counts: (1) it served many minority neighborhoods and, (2) there were not enough other banks in the city to absorb its operation without creating an unhealthy concentration of banking power in the hands of a few. It was unclear what the minority issue had to do with it inasmuch as every neighborhood in which Commonwealth had a branch was served by other banks as well. Furthermore, if Commonwealth were to be liquidated, many of those branches undoubtedly would have been purchased by …

… the British Crown became confused into thinking it needed to borrow money to fight the French. The Bank of England was created out of social credit, and was begun with tally sticks, which were just government credit.
The fact that governments either cannot figure this out or are corrupted to hand over their money creation function to a private entity, puts them on the road of needing to borrow their own money.
The Perverse Incentives to Create Unsound Loans
Within this desire to keep the borrow permanently in debt, comes the incentive to create unsound loans as is explained in …