The economic crash in 2008 was so dreadful that even after more than a decade, it is still regarded as the greatest financial crisis in all history. The United States of America lost about $3 trillion worth of value, and around 8.7 million people got unemployed in a heartbeat.
People, especially those who are living from paycheck to paycheck, have suffered on how they will make ends meet. They have lost faith in banks because they have exploited their power and destroyed the economy.
In actuality, banks played a great role in the 2008 market crash. They have placed high-interest rates on junk loans. Although this seems to be a bit of exaggeration for those who didn’t get affected much, it wasn’t for those who struggled to put food on the table.
Let me give you an example.
American International Group, known as AIG, was one of the largest American multinational finance, but not until they gave triple-A ratings to junk loans. AIG borrowers defaulted because their main aim was to make money out of thin air. If AIG didn’t permit any fake ratings back then, the 2008 crash wouldn’t be so severe.
Even though the government didn’t really point out that AIG was highly responsible for the crash, the company’s CEO, Joseph Cassano, was branded as ‘the man who crashed the world.’ Unfairly, this man who was responsible for the catastrophic knockdown of a hundred-year-old company and the economic decline in the United States and all over the world, sending the world into a recession, received $43 million upon getting fired.
Countries worldwide are connected with the United States, so an economic crash within the country can greatly impact nearly the rest of the world, to a great degree in Europe. In fact, Greece is yet to recover from the great crash that happened over a decade ago.
However, everything that we have talked about so far is merely the tip of the iceberg. There are a lot of things that people are yet to know about these low-key robbers. We are yet to know how banks cheat people as well as the government and how filthy rich people get richer, making billions of dollars through banks from thin air.
Here are the three truths that banks don’t want you to know:
Fake Accounts
Wells Fargo has created a good name for itself because it wasn’t entangled in the 2008 economic crash like AIG. However, Wells Fargo it to several news headlines in 2016 because of the fraudulent activities it had undertaken. The so-called “trusted” company created millions of fraudulent savings and checking accounts in the name of their clients without consent.
The fraudulent activity was exposed after several clients noticed being charged anticipated fees and receiving unexpected debit or credit. According to early reports, Fargo Wells’ workers are the ones to blame, but the upper management was later found to be accountable.
Supervisors were said to coerce their low-ranking subordinates to open up faux accounts. News uncovered that Wells Fargo created about 1.4 million fake savings/checking accounts in the fraud, and over half a million credit card accounts were instigated without authorization. Fake content information was used to cover the fraud.
It’s crazy to think that such a well-trusted bank would use your name to create a fake account using your personal information to make coffers of money out of you.
There were also cases where money got moved out of legitimate accounts. This was made possible through the process of pinning, whereas the client’s number gets set to four zeros. The bankers take control of the customer’s account, enrolling them in various financial programs like online banking.
Perhaps, the bank’s trustless management of funds is the primary reason why a lot of people are turning to cryptocurrencies.
Of course, Wells Fargo did not get away with its subterfuge and was asked to pay a fine of a hundred million dollars, $6.1 million for customer refunds for inappropriate fees, and about half a million dollars for settlement.
The US-based financial giant was able to pay a $2.3 billion settlement fee two years later, yet we can’t ignore the fact that no one got imprisoned because of their unlawful act. As a matter of fact, the company’s top executives still earned executive bonuses worth millions of dollars.
Inflation Abuse
Another truth that banks don’t want you to know is that they abuse inflation. It’s no secret that the rich only get richer, but are you aware that banks are somewhat at the helm of it?
Don’t believe other people when they say people don’t get rich because they allocate all of their money for their basic necessities, and the wealthy get wealthier because they’ve got a lot of money to invest. Actually, it’s because wealthy people are less likely to default on their loans.
Two years ago, when the world economy experienced a decline because of the surging cases of Covid-19, the U.S. government distributed stimulus bills, giving out money to its citizens.
Since they injected trillions of dollars into the economy, inflation rose to insane levels— home prices skyrocketed to 20%. Hence, if a big company borrows one billion dollars at a 1% interest rate, the government is technically just loaning the money with almost zero percent.
Banks Help Rich People Avoid Taxes
If you are following the world’s famous billionaire, you would know that Elon Musk has about $300 billion net worth while Jeff Bezos has about $200B. Of course, this tremendous amount of money isn’t in cash but rather placed in an investment.
If these billionaires sell their stocks, they will have to pay a tax of around 20%. So, if Elon would sell $100 billion dollars of stocks, he would be obliged to pay $20 billion. Who would want to pay such huge money for something unbeneficial?
Now, banks have figured out a way for billionaires to escape their crazily expensive taxes— that is, borrowing money against their assets.
Banks lend hundreds of millions of dollars to billionaires with a diminutive interest rate, so they won’t have to pull out big amounts from their stocks and pay hefty taxes. Even without touching a single stock they own, filthy rich billionaires were able to get themselves a grand mansion, prestigious yachts, private jets, and any lap of luxury you can think of.
Filthy rich people only pay banks back whenever they get dividends from companies they invested in or when they make enormous profits from their business venture. It makes sense. Why would these billionaires pull out stocks that are earning big interests just to hurt their pockets with taxes, right?
Unfortunately, this privilege is only given to people on top of the chain.