do banks rule the world?

Despite their control over our money, there's only so much banks can do to command world leaders.
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Ok, so maybe a New World Order or a One World Government engineered and manipulated by secret societies and the alphabet soup of groups they spawn isnt for you. You need a tangible institution, something which would clearly have a lot of power and easy access to the highest levels of world governments. Thats where banks come to the aid of conspiracy theorists. Yes, banks. The very same ones where you put your hard earned paycheck every other week or so and the central banks that help governments regulate them all.

Banks have access to tens of trillions of dollars all over the world. Estimates put all the money in the world at around $90 trillion and banking institutions move all this cash around across the planet at lightning speed. And banks are old. Very old. The first prototype for international banking systems was actually designed in the late 1200s by the Knights Templar to invest the money they got from guarding pilgrims to the Holy Land on their journeys and unearthing all kinds of ancient artifacts with religious significance, in churches and government treasuries. Their banking system worked so well that the Templars had to be eliminated by the King of France who owed them far too much money and resorted to the Medieval European trick for getting out of big debts. Phillip accused the Templars of sodomy, heresy, Satanism and conducting blasphemous rituals during their worship. The charges stuck and those Templars who werent tortured and executed were disbanded. In the modern world, this would be the equivalent of debtors who default on their mortgage getting the federal government to kill the executives of the lender and dissolve the company.

Banks today adopt a very similar model as the Templars, albeit with virtual money and all sorts of complex accounting. People give banks money and almost all of this money is used to make loans to others or put in other companies or financial markets. And its all of this investing and financing that makes conspiracy theorists worry. If there are institutions whos money helps to hold up companies and who can make loans to even the most impoverished state, cant all that money ultimately control countries and those who rule them? Money is a powerful motivator and by using it as a carrot, cant banks and those who run them string along the entire planet?

Well, no. This New Banking Order theory ignores the fundamentals of how a bank truly works. If all the depositors in a bank were to come to every single branch it operated and asked for all of their money back, the bank would instantly go bankrupt. Something similar happened to many banks during the Great Depression in 1931 and 1933 and to Washington Mutual and Lehman Brothers just now. Its known as a run on the bank. All that money you deposited is being used. Its been given out to pay for new houses, new power plants, new offices, new airplanes and so on. The bank is now waiting until the money is paid back while keeping a certain small reserve mandated by the government that regulates it to make sure that a number of people can get all of their money back if they really need to. All the money in the world is finite and close to 95% of it is being used at any given time.

In addition, to pull off global plans, all banks need to work together in concert to make sure the money goes to the right places. However, banks compete against each other in well, just about everything. They’re individual institutions pursuing profit. Even government chartered and ran banks still compete with private domestic institutions and financiers as well as overseas banks. And banks aren’t immune from government influence either. Governments in most countries reserve the right to print and circulate money. They also set reserve rates (how much cash any given bank is required to keep on hand) which controls how much of its assets a bank can put in use and ultimately, the banks potential incomes. Finally, as we see with the failures of WaMu and Lehman Bros, governments act as an ultimate insurance policy to bail out banks which run out of money and cant pay back their depositors.

Even currencies can’t control a government. For currencies that plummet or get hammered so much on the world markets that the fiscal system of the country that controls it is about to collapse, trading can be halted, currencies can be repriced, revalued or hinged to another, far more stable currency to provide an artificial island of stability for those denominations which cant survive out on the open market all by themselves. Thats not always a bad thing. China has used currency pegging to gain incredible competitive advantages in manufacturing prices.

All this is well and good, but what about the IMF and the World Bank? These guys are involved in bailing out entire nations. Surely they could dictate how the ruler of a country being bailed out must behave, right? Well, both the IMF and the World Bank have to get money from somewhere too and it falls to competing banks to sort out the best possible loan packages. Governments of the countries which come up with the money for the two global institutions can and often do dictate terms and conditions for receiving aid but this is just everyday politics applied when a nation in the crosshairs of wealthier and more powerful countries is in dire need. Its not banks and banking elites dictating policy but the heads of state who summoned the banking elites to cough up the money for their plans and convince bankers that lending hundreds of millions of dollars to a nation drowning in debt and unable to pay for anything is a good idea in the long run. In the end, both the World Bank and the IMF end up waiting for a very long time to see their monster loans fully repaid and can only tackle a few countries at once.

It makes for good fiery speeches of would be revolutionaries and activists who want to stick up for the little guy on the world stage to accuse powerful banking syndicates across the globe of trying to force their will on billions of people. And it makes for catchy conspiracy books which use these speeches to construct the idea of a clandestine order of bankers subjugating nations to their whims because lets face it, we like hearing about clandestine orders and their insidious plans. When times are tough or we feel lost and uncertain staring a problem in the face, it helps us to point to a scapegoat and pin all of our problems on huge banks or the Freemasons or the Illuminati or Little Green Men. Its fine if they have a nefarious plot to conquer us all. It really is. At least now we know who to fight in our quest to get to a prosperous future…

# oddities // banks / finance / investing / new world order

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