MICHAEL WALSH DUMMIES GUIDE TO ECONOMICS: Are you careful with your finances; pay your credit cards on time to avoid interest charges? Don’t be too smug. Reflect, every time you purchase a train ticket; buy a pair of shoes or call an ambulance roughly 40 per cent of the cost will have gone straight to your bank’s vaults.

According to Ellen Brown, attorney and chairman of the Public Banking Institute, bank interest charges are of a regressive nature. This means the poor are milked to satiate the rich. A public rather than a private banking sector would show a discount of up to 40 per cent off everything we buy or use. This is the reason why Western capitalism’s private banking system cannot hope to challenge publicly owned banking models; it goes to war against them when it is an option. i.e., National Socialist Germany, Ghaddafi’s Libya, al-Assad’s Syria, Saddam Hussein’s Iraq etc.

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In the 2012 edition of Occupy Money released in November, German Professor Margrit Kennedy reveals that 35 to 40 percent of everything we buy goes on bank interest. This interest is bled by bankers, financiers and bondholders. Putting it bluntly the wealth of each nation’s marketplace is clandestinely transferred to banks’ e-vaults without anyone being aware of it. This is despite the fact that every time buyers spend $100, £100 or €100, 40 per cent of the spend is vacuumed up by the banks.

Right along the chain of supply, from wherever in the world it is sourced, those involved in getting the raw materials to retail standards are heavily dependent upon bank credit. Without bank loans, they cannot produce products or services we depend on. Each in this vital chain must pay for the investment, premises, labor, materials and transport, etc. This is before we find their service on the shop shelves or at the end of the telephone order. This credit is accumulative and variable.

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Dr Kennedy, who researched this spider’s web of deceit discovered that even in fiscally prudent Germany such interest adds 12 per cent to the cost of refuse collection. When we receive our water bills presume an eye-watering 38 per cent of the invoice value will go directly to the e-vaults of the private banking sector because the water companies borrowed from the banks and they pay eye-watering interest charges. Public housing? Don’t go there! Again in ‘prudent’ Germany a breathtaking 77 percent of rentable public housing goes into private bank interest.

If you are an American hesitate before you breathe a sigh of relief: compound interest on most U.S. mortgages amounts to 80 per cent of what you pay for your home or business premises. Is it the home of the free? More like the home of the free ride if you are a bondholder, banker or financier.

The noted German researcher and analyst draws heavily on the findings of economist Helmut Creutz. As we might expect the researchers’ findings are based on the Washington Occupied German (WOG) economic model. If you are not a German don’t get too excited; the same system is in place throughout Europe, the United Kingdom and the United States. 

In the case of the latter financial sector profits comprise an incredible 40 percent of the price of whatever purchases Americans buy or use. This may go some way to explaining why 1 per cent of Americans own 42 per cent of the national wealth. Only 5 per cent of this wealth, thank you very much, is shared between those making up 80 per cent of the population.

As Ellen Brown poignantly points out the implications are stunning. If we had a financial system that transferred private bank interest back to the public purse 35 percent could be lopped off the price of everything we buy. That means we could buy three items for the price of two; our salaries would go 50 per cent farther than they go today.

Is there an answer? Yes, it is coming simply because Western capitalism cannot continue to be based on a system so corruptly in favor of international banking conglomerates in the face of competing currencies like the Ruble and the Yuan. They will be replaced by a publicly owned banking system. It is because competing trading nations have already done so leaving Western capitalism no choice in the matter.

Direct reimbursement to the people is a hard system to work out, but there is a way we could collectively recover the interest paid to banks. We could do it by turning the banks into public utilities and their profits into public assets. Profits would return to the public, either reducing taxes or increasing the availability of public services and infrastructure. By borrowing from their own publicly-owned banks, governments could eliminate their interest burden altogether.

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