Wednesday, October 26, 2011

Move Your Bank Day

Thugs on the left are engaged in a peoples struggle demanding that people take their money out of X bank and put it in Y bank. (MoveYourMoneyProject.

I used to believe that Savings and Loans were good things and banks evil. Then the Federal Savings and Loan Insurance Corporation (FLSIC) imploded and I learned that Savings and Loans were every bit as corrupt as banks.

The problem is not the business structure, but the fractional reserve system created by the Federal Reserve.

The FLSIC was a federal insurance company that socialized the risk of private companies. The result was a large number of risky loans in overbuilt communities that all came crashing down on the taxpayer.

The move your money movement is based on the naive notion that it is the business structure of banks that causes economic problems. Banks use a corporate model while credit unions are buyer's co-ops.

I would have sympathy for the Move Your Money movement if it had a sound reason to move money. But, the problem is the systemic debasing of the currency caused by fractional lending of the Federal Reserve.

Fractional Reserve lending is as likely to take out a credit union as it is to take out a bank or savings and loan.

It is always wise to diversify. But moving money out of an institution for a political statement is apt to do more harm than good.

ADVERTISEMENT: If you are diversifying, it is probably good to have some money on hand in physical or gold coins.

Why, there just happens to be a Buy Gold page on this site with affiliate ads.

If you want to get your mortgage or your savings out of the system, you might try the Lending Club. The Lending Club coordinates person to person loans.