There is no loan in loan agreement

Loaned money is money created via an elaborate scheme of paper shifting and number crunching.

This according to the New Economic Rights Alliance.

The organisation was formed to present research and expose facts about the South African banking system. They claim South African citizens are being exploited by banks and say loan agreements are nothing more than a series of one-way payments from the customer to the bank – with no risk to the bank.

Take an overdraft, for example. An overdraft allows you to spend money you don’t have. The alliance says this extra money does not come from the bank – the bank does not transfer its own money into your account as a loan – instead you are creating, and then spending, new money. Plus you are charged interest.

When a customer owes the bank money – whether a loan, interest or repayments – and assets become threatened, we wrongly think the bank is entitled to its money. This is incorrect, says the alliance, it says the bank is in need of nothing because they gave you nothing in the first place, it was simulated money. Which means they suffer no direct loss, while their customers often suffer greatly.

According to the alliance these actions are in breach of our human rights because it is illegal for a bank to claim more than double the amount loaned from any borrower, which is precisely what they do. The concept of boni mores – the upholding of moral behaviour for the sake of society – is not being advocated or endorsed by the banks, no matter what they tell you.

Banks profit hugely from securitisation, defined as the financial practice of pooling various types of contractual debts and selling them as securities to investors, as they swiftly and relentlessly foreclose on assets in order to satisfy the needs of their investors and shareholders. The alliance maintains that banks do not disclose this practice to their customers, who have a lawful right to this information.

And once that loan enters a securitisation pool, the bank loses its rights to it. A frightening fact, and difficult to fathom. Your home or car, for example, could be taken away from you – illegally.

Details: www.newera.org.za