Friday, December 9, 2016

Tontine / Private Micro Banking

Well Fargo got busted slamming customers, a term used for creating accounts a customer did not authorize.  They were fined   Bankers could give a $#*+ when they are fined, because the fine is like taxes, paid by their customers.  The managers who gained $60 million or whatever in bonuses pursuing the scam do not go to jail, nor get their bonuses clawed back.  Hence there is nothing to keep other bankers from doing more of the same.  Since there is no rule of law when it comes to banking we have this kind of chaos, bankers slamming customers.  There is no rule of law because we have regulatory capture, the regulated dictate the rules to the regulators, and then whimsically ignore them anyway.  For their part, it is well documented the regulators simply spend their time watching porn on the internet.  And then they wonder how someone like Trump could get elected.  People want to escape the chaos of failed government policy.

Odd, then comes the story of a government turning to anarchy to curb banker's excesses.

NEW YORK — The state of Illinois is suspending most of its banking relations with Wells Fargo.
Illinois is the second state, following California, to punish Wells Fargo with a one-year business moratorium in the wake of the bank’s fake account scandal.

This is how anarchy works.  When someone misbehaves, others in the community withdraw their support.  If it gets bad enough, you are so shunned you are reduced to living in the woods to survive.  No prisons, but condign punishment.

People who kill murderers and pederasts are also judged, and shunned or not, depending on the community opinion of the action.  Here courts are truth commissions, not "criminal justice" charades.

Since banking in capitalism is necessarily chaos, one ought to establish micro free market banking on one's own.  There is something called a tontine everyone should employ, much diminishing the hegemon's banks.

A tontine is an accommodation of any number of people, say at least four, but can be thousands, who pool contributed funds into an account on say a monthly basis.  Say the four put in $50 each a month, then in a year, the account has $2400, the next $4800, then $7200,  and so on.  More anon, but first a bit of history.

One of the precipitators of the French Revoluton was when the hegemon, in this case the King and his courtiers, had seized the tontines of the common man and used them to finance Versaille, war and other frivolities.

Tontines were formed by a group who each month contributed a set amount to a fund, and then as they aged the fund grew.  The point was to form a pension for anyone who made it to old age.  If you died, well, you did not need anything, so the survivors got the balance. A group of twelve might make it to 45, when the tontine was spit up by the survivors.

The funds were never enough to murder over, and the participants friends and family, enough to maybe open a barber shop or something to do for income into old age.  Not enough to retire on, since the idea of "retirement" was alien, if not evil.

It may not have been much money for each group, but it was collectively a massive amount tempting even the King.  He stole it and paid for it with the lives of himself and his family.  By the time of the French Revolution, the elements of modern banking were in place, and the problems emerged and the system failed much faster.

The idea of the tontine is good if one goes back to the older (even older than the 1700s) notion of banking, and that is currency issued against money, as in gold or silver.

Now I know I have been disparaging holding gold or silver, at least speculating in money, but the idea of forming a tontine, with say 4 people kicking in $50 a month, $200 a month being invested in say silver coins, and left in a coin shop.  Coin shops today often will store the gold and silver of their customers in their vaults, like the original banks (banque, a shelf where gold and silver workers stored customers' bullion.)

Two years in, this tontine has $4800 in silver sitting in the dealers shop.  Someone's auto transmission goes out, and they need $3 grand to replace it.  The tontine makes a loan (no interest) to the member, who repays it in time.  No banks involved (except for the dealer, acting as an original-style banker.)

Can you imagine how much income generation banks would be denied if this practice were reintroduced.  Can you imagine the strides toward peace and prosperity we could make if people got their money to fix the transmission from their own tontine, instead of the modern bank?  Can you imagine the personal transformation people would need to go through to save each month and be responsible to each other?  What a contrast to banking today, where no one is responsible to anyone else.  Ever.

"But but but, no interest?  With the magic of compounding interest, I can be rich at retirement if I contribute $50 a month starting in my youth. "

No you can't.  In a ponzi scheme, which underlies the interest compounding game, it stops all of a sudden.  This is just the start:
The Dallas Police and Fire Pension System's Board of Trustees suspended lump-sum withdrawals from the pension fund Thursday, staving off a possible restraining order and stopping $154 million in withdrawal requests.
The smart money, those who made the most, got out first.  Saps are left behind, with empty bags.

The banks are our enemy.  They charge too much to do too much, and distort the economy.  Withdraw your consent to work with them.  Escape the chaos of no-rules bankers, and flea to anarchy.  Form a tontine, find a coin dealer from which to buy silver and store it for you, and then get some popcorn, and sit back and watch as cops go into retirement impoverished.

And the rich build doomsday bunkers.

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