The REAL Story Behind the Big Australian Banks Gouging Their Customers of Billions

Today, a Sydney Morning Herald analysis of a Reserve Bank of Australia report discovered that “The big four Australian banks [ANZ, Commonwealth, NAB, and Westpac] have used the cover of the global financial crisis to charge borrowers more than the increase in their own costs, resulting in big profits for the lenders and much higher interest bills for many customers… The analysis reveals that a borrower with a three-year fixed-rate home loan of A$300,000 ($370,500) pays a personal contribution to extra bank profit of between A$75 and A$125 of the monthly mortgage bill.”

Christopher Zinn, a spokesman for the consumer advocacy group Choice, further added, “It’s well documented that the large banks profited in various ways from the financial downturn, including taking market share from smaller competitors, and increasing their lending profit margins.”
Though banks were hit with a 1.3% to 1.4% increase in funding costs, they increased interest rates on fixed rate mortgages by 1.7% to 1.8%; on business loans by 2% or more; and on personal loans by more than 3.4%. By gouging fixed rate mortgage holders, and business and personal loan holders, the Australian banks were able to lessen the increase in ARMs to 1.1%, an increase less than their increase in funding costs.

Steve Munchenberg, the chief executive of the Australian Bankers Association stated that these huge increase in interest rates were necessary to compensate for the additional riskier profiles of their customers. But Munchenberg’s argument is circular because banks were responsible for introducing more risk into the global financial system by lobbying for the creation of complex derivative products that were never intended to benefit the consumer but only to fatten the bottom line of banks. Then when these products blew up in their faces because they misrepresented them to consumers/institutions that never fully understood what they were buying due to the complexity of the products sold to them, the banking executives rationalize their gouging of customers as necessary to compensate for risk that the bankers injected into the system in the first place.

But the REAL story behind this headline is that banks have been gouging customers daily for decades before this financial crisis. Interest rates charged to customers should not have to be well above a bank’s funding cost to be considered gouging. In reality, given the fraudulent nature of our monetary system, any interest rate charged on virtually zero labor should be considered gouging. And the truth of our monetary system is that nearly every loan a bank creates is merely a digital entry on a computer that requires zero labor and one in which the physical paper cash that backs that loan is never even printed by a Central Bank. 90% or more of the global banking system consists of a digital world of digital bytes that are assigned to various debtors and creditors and enables banks to charge excessive interest at all times on their unsuspecting marks for virtually zero labor and 100% deceit.

If you’ve ever had that gnawing feeling that something was wrong with the banking system on a very fundamental level but could never figure out exactly what is so wrong about the system, then focus on the big picture. Focus on the minutiae, and you draw energy away from the larger issues that should be commanding your attention. Focus on the minutiae and you may win the short-term battle but you will definitely lose the long-term war. If you’ve been right about the big picture for the past five years, you’ve likely avoided huge losses when other investors were losing the shirts off their backs and perhaps even whipped up some enormous gains at times when others were experiencing enormous losses. And continuing to be right about the big picture will mean that your financial health will continue to flourish even when phase 2 of the global monetary crisis kicks into top gear. The minutiae distracts people from understanding the reality of the system so that’s why the media loves to entangle the public in the minutiae. For example, the recent up 2% on Monday, down 2% on Tuesday rollercoaster ride of manipulated stock markets confuses and distracts investors from understanding the big picture of the huge bubble underlying most major global stock markets today. And the minutiae of stories about banks gouging their customers with excessive fees distracts citizens from understanding the much more important big picture of the fractional reserve lending scam.

Read the original story at The Underground Investor