Global Shadow Banking Monitoring Report 2015

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  1. OC Sure commented on Nov 19

    ” The shadow banking system can broadly be described as credit intermediation involving entities and activities outside of the regular banking system.”

    We define our terms and must question the presumptions. What is a banking? What is credit? What is intermediation? What is a shadow?

    Banking is the business of safeguarding depositors wealth and if the depositor agrees, then it is also the vesting of this wealth in to other’s while bearing the risk that more wealth may or may not be returned. The fundamental principle is that wealth is not created by the bank at all. Someone either initially brings their wealth to the bank or someone else returns that same wealth, augmented, to the bank. If an institution claims to be lending wealth that does not already exist, then they are not a bank which vests in others but instead they are stealing from others.

    Credit is the mediation of an exchange that involves a time delay that is not immediate. The exchange, regardless of the amount of delayed time, will always be either the vesting of the wealth that already exists in to others or it will be the extraction of wealth from others by introducing new currency that is not represented by existing wealth.

    Intermediation is either justice or injustice: That an intermediary is introduced to settle an exchange is honestly done so to equalize the disproportions of the values being exchanged. As long as persons must perform productive work to meet the demands of living then the presentation of an intermediary will always be necessary for the fact that what people do and the quality of the work demanded can not ever be exactly equal. If the intermediation is facilitated such that both sides are not equalized and one deceives the other that they have produced a value when they have not then the mediary is unjust since its purpose is to maintain the disproportion and swindle an ill gotten exchange.

    Shadow is that which resides behind the object that stands between its location and the light. Nevertheless, without the light there could never be any shadow.

    Therefore, we can see that nowhere on the planet does the institution of banking exist. We have something else; everywhere. To analyze that credit is “intermediated” in front of the the wall of regulation (in the light), or behind the wall of regulation (in the shadows) is simply to introduce a ruse so as not to discuss what exactly is being mediated. Regardless of which side of the wall the exchange is taking place, no one dares ask, ” an exchange of what?” The answer to the question for those in the shadow will and must always be exactly the same as those in the light. If what resides in the shadow is unjust then this can only be because of the source. At the source, then, we must ask, is the currency introduced mediating the proportionate exchange of full value for full value? It is not. It cannot be. Otherwise, why build the wall of regulation at all?

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