Friday, October 23, 2009

Banking Comment

Someone just said to me that the Bankers pay a lot of tax on their bonuses and that is tax that we don't have to pay!
Now, is it just me, or is that about the stupidest thing you have ever heard? At first - for perhaps a tenth of a second, or less - that might seem like a statement with some merit. Until the brain cells wake up and kick in and say, "Wait just a minute here, WE paid them their bonus in the first place, we'd be a lot better off if they (The Banks) had not taken it away from us and given it to themselves as bonuses." How did they take it from us? Well, if I make a deposit in my bank now, of say $1,000 or $50,000, it doesn't matter how much, the interest rate is .1% - one tenth of 1 percent! Meanwhile, they are getting at least 50 times as much, or more (5% would be 50 times) How would you like to make 50 times as much money as you make now? Then, if you use a credit card they charge the merchant from 2% to 5% up front - that is why merchants don't like them, and raise their prices to you to cover that charge - then the bank charges you somewhere around 15% interest (150 times what they pay you on your deposit). If you are late in paying them they will raise your rate to as much as 25% (250 times as much as they are paying you) Then of course, because they, "can't make a profit", they have to come up with even more innovative ways to make money (So they can pay themselves multimillion dollar bonuses on the, "profits they can't make") Those innovations are in the form of charges, for example annual fees for you to use the credit cards that they make such huge amounts of money on already and other fees to put and keep money in their banks! They are called bank charges. Fees to send money, these are huge - it can run into the hundreds of dollars for me to wire money to my parents in England - and they don't even need to use a stamp! They just send a 'wire', it probably takes a few seconds to enter it and tenths of a second to send it, along with hundreds or maybe thousands of others. When you exchange money, if you take a trip, again a huge fee, dollars to pounds can cost 5 or 10 percent of the money! (The exchange rate for a million dollars for example may be $1.60 to the pound, but if you are changing $300 they will charge maybe $1.80 for a pound, they will get that pound for $1.60 because by the time they exchange your money and the money of thousands of others they are exchanging millions of dollars - again with only the push of a few keys.) There are lots of other ways that they rob us, so they can give themselves multimillion dollar bonuses, on which they pay tax! One way is to loan out that money you put in their bank, more than once! Would you believe they have had the law changed so that they can loan your money out up to 40 times! So, if they give you .1% for your deposit and then loan it out to someone for a mortgage at 5% they are getting 50 times what they pay you- a good return you say? How about if they loan it out on credit cards, at 15%, other loans at 8%, more mortgages at 6% etc etc. Lets say they get "just" 5%, but do it 40 times, on the SAME money, that is a 200% return on your money or 2,000 times what they are paying you for it!!! No wonder they can pay them selves such huge bonuses. They say the bonuses are to keep 'good' talent. But even with this 'good' talent they went broke and had to ask Uncle Sam (You and me) for even more money! How good are these people, if they can't keep their banks afloat making hundreds of times what they are paying you for the money they use? Again, they want to be rewarded, hugely, for bringing the country to its knees. Anywhere else, and by anyone else, it would be called theft, pure and simple.

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