It's Time To Become Your Own Banker, Here's How

Tyler Durden's picture

Authored by Simon Black via,

Sometimes I wonder why most of the giant mega-banks are based in New York.

They should be here in Las Vegas, the gambling capital of the world. Because that’s precisely what they’re doing with your money.

Actually it’s not even your money.

From a legal perspective, every single penny you deposit at the bank becomes THEIR money. You’re nothing more than an unsecured creditor of the bank.

And now that they legally own what used to be your money, the bank can gamble it away on whatever crazy investment fad best serves their interests.

Here’s an easy way to understand it:

Imagine you were moving and needed to rent a storage facility for a few months to store your stuff.


You rent a U-Haul and move everything into the storage unit.


The way banking works, the second you drive away, the storage company now owns your furniture. Not you.


And as the brand new owners of what used to be your furniture, the storage company can do whatever they want with it.


They can rent out the furniture to another customer, charging steep fees to let a complete stranger sit on your sofa and watch your TV.


(Naturally you’ll never see a penny of that money.)


Of course, that complete stranger might not treat your furniture all that well. He might even destroy it. No more furniture.


Often the facilities get in on the business together; one storage company will rent your furniture to another company, which rents it to another, and then another.


After a while no one actually knows where your sofa is. But it doesn’t matter because the storage companies are all making lots of money, and few people ever really ask.


Eventually their standards drop so low that they stop performing credit checks altogether when someone wants to rent furniture from them.


They’ll rent your dining room table to anyone who walks through the door, even if that person has a history of destroying other people’s furniture.


After a while, these deadbeat rental customers have destroyed so much of other people’s furniture that there’s very little remaining.


A lot of the smaller storage companies aren’t able to stay in business as a result.


But the big ones… they all get together and go to the government, claiming that they’re way too important to go bankrupt.


They demand to be bailed out and tell all the politicians that society would collapse if their businesses failed.


The government listens, and the big storage companies receive a massive taxpayer bailout.


The Federal Furniture Reserve even turns on its manufacturing operation, creating countless sofas, love seats, and dining room sets out of thin air. And they give it all to the big storage companies for free.


The big storage companies are back in business, with top management rewarding themselves with record bonuses.


Funny thing, though, their bad behavior doesn’t really change. They still rent out your furniture to other people and provide zero transparency into those specific deals.


And rather than competing to provide the best service for their customers, they get together to fix their prices and bilk the consumer even more.


Hardly a month goes by without a major scandal where some storage company was found engaging in extremely unethical behavior.


One day you decide that you’re ready to move in to your new house, so you go down to the storage facility and ask for your furniture back.


Instead, the storage facility treats you like a criminal suspect and gives you a bunch of excuses about why they can’t release “their” furniture.


And as soon as you walk out the door they file a report with the government claiming that you’ve been acting suspiciously because you had the audacity to ask for your own sofa back.

Clearly no rational person would ever trust his/her furniture to such a corrupt and absurd storage industry.

Yet as ridiculous as it sounds, that’s pretty much our banking system in a nutshell.

And we trust our life’s savings to that system… something far more important than furniture.

The storage industry would never become that rotten because it’s still a relatively free market.

If the industry were screwing its customers, a bunch of entrepreneurs would start better, more honest storage companies, driving the bad apples out of business.

That can’t really happen in the banking industry because starting a bank is almost impossible– trust me, I’ve started two of them.

I’ve had success, but it’s been one of the most time consuming, frustrating business ventures in my life.

And not enough people are doing this, so there isn’t going to be any serious competition to the mega banks anytime soon.

But there is a positive trend brewing: technology is starting to make banks obsolete.

Any basic retail function of a bank– deposits, loans, foreign exchange, funds transfers, etc. can already be done better, faster, and cheaper outside of the banking system.

You can keep funds in the blockchain, crowdfund a loan, use social networks and mobile apps to change money.

None of this requires a bank.

So, long-term, the banks are finished.

But for now, it makes sense for anyone who truly understands this scam to become your own banker, which you can do simply by holding some physical cash in a safe.

The fewer middlemen you have between you and your money, the safer you are.

And given that interest rates are still hovering near 5,000-year lows, it’s not like you’re giving up any meaningful interest.

So there’s practically no downside in taking this very simple step.

Do you have a Plan B?

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swmnguy's picture

Then I'd have to string myself up from the nearest lamppost with concertina wire.

As you say, "No, thanks..."

duo's picture

Or on your knees in front of the Obama....

hedgeless_horseman's picture


But there is a positive trend brewing: technology is starting to make banks obsolete.

Mattresses have been around for quite a while.  

Want to get the straight talk on crypto, and ask all the questions about disintermediation you are afraid to type on the internet?

Come to Marfa next month...

10:45am Crypto currencies: Ken Griffith, The Death of Banking and the Rise of New Financial Ecosystems - How to Make it Work For You

Speaking of mattresses...better hurry!

There are only just a few of the Safari tents available at El Cosmico. 

Teepees, yurts, and trailers are all booked.

swmnguy's picture

Chicks in filmy negligees included, or BYO?

hedgeless_horseman's picture


Maybe they are the turndown service at El Cosmico? 

Dutch Tubs: Wood-fired hot tubs are available to rent every night from 6-10pm. We light and stoke the fire, provide extra wood, and put it out at 10pm. Reservations are required at least 24 hours in advance. Call the front desk to reserve or reserve online when booking your accommodations. Cost is $85 per tub.


Just learned there are now a couple of rooms available at the St George.

max2205's picture

90% don't have 200 bucks left at the end of the year.....

StackShinyStuff's picture

I have to agree with Mr. Simon.  Have some cash.  Somewhere.  

mkkby's picture

You actually read simon black.  Proof of the idiocracy.

Pop3y3too's picture

There are still middlemen required to "confirm" bitcoin transactions. I ran afoul of these intermediaries while trying to transfer some of my bitcoin between two of my wallets. Turns out I didn't pay enough fealty to the BTC overlords (miners) to be seriously considered when I wanted to move my money from my wallet to my wallet. My "money". My wallets. Ya think? .....


I'll stick to stacking, mattresses, safes and gun powder backed lead protecting it all, thanks.

r3phl0x's picture

I hear ya, but FWIW you usually do not need to go through the "network" to move funds between your own wallets. Instead, import some/all of the first wallet's private keys into the second wallet, giving it control over the coins.

Pop3y3too's picture

Well, I'll be dipped in whale snot. I did NOT know that! That's alright...needed to get out of it anyway. I appreciate the real silver coins more and BTC was getting into serious nosebleed territory. I never have been a good gambler.

natxlaw's picture

I say you keep some for emergencies. Even if it is only 500 bucks. What if the shit hits the fan and you need to wire some money for a new starter. That bitcoin will work way sooner than a bank account will after a major failure.

Pop3y3too's picture

If it hits I'm thinking anything I need that I don't already have (which isn't much) won't be had with any amount of bitcoin. Being able to walk up to the seller and hand over payment in person will most likely be the only way to get it. 


Been thinking about getting an SGE 400/3 to round out my stash but also not sure I want to be the only one left standing just because I had one.

Troy Ounce's picture


Men can join the arm struggle instead.

any_mouse's picture

" trumpala May 12, 2017 3:53 PM
"It's Time To Become Your Own Banker"

No, thanks ..."

You paste in a link to the article in your comment to the article.

You lack the basic skills to do much on your own.

kochevnik's picture

Without third party interfering in all two-party transactions government would have no purpose

Consuelo's picture



That's where all of the easy money awaits...

U4 eee aaa's picture

and without dolphins the oceans would have no porpoise

swmnguy's picture

The International Man Of Mystery didn't even mention Alpaca ranching in the Chilean Andes this time.  BitCoin is his new gig?  

"So there’s practically no downside in taking this very simple step."

OK, that's enough to send me racing for the exit.  Have you ever heard that, without finding out later exactly what "downside" means?

any_mouse's picture

Black is the "Sovereign Man".

"International Man" is another douche that also posts articles on ZH.

JonNadler's picture

remember when banks held that yellow shiny stuff...?   

logicalman's picture

More like history than memory.

Justin Case's picture

Real banks hold the yellow stuff, b/c it's unencumbered pure money that has never been rejected for the settlement of accounts, NEVER! Paper fiat proxies always fail, b/c their intrinsic value is zero and unlimited supply, like dirt and takes no labour to produce.

The west has had an anti-gold campaign going since the 70's, thanks to the default and Nixon closed the gold window. Bankers hate gold, it's the anti-dollar.

Asian, European and Scandinavian banks hold gold. It's just the west that is trying to convince us that Gold is a relic. One of the chief virtues of a gold standard is that it serves as a restraint on the growth of money and credit. It makes runaway government deficit spending and major monetary catastrophes such as hyperinflation practically impossible.

Opponents of a gold standard can’t defend the political malpractices that are enabled by a fiat currency regime. So instead they spin a narrative about how gold supposedly hampers the economy.

pavman's picture

Thanks Justin. For a minute there I thought I had stumbled onto MSNBC. Glad you reminded all of us plebs of the Nixon gold window shite, cause you know we didn't know.

Winston Churchill's picture

Oh the irony burns.

Keep it in a blockchain and have it ransomed.

Hyjinx's picture

How do I get others to pay for my hookers and blow?

swmnguy's picture

Use BitCoin to buy an Alpaca ranch in the Chilean Andes.

Jesus Christ, do we have to explain everything to you?

U4 eee aaa's picture

You learn something new on this site daily. I didn't even know Alpacas knew how to ranch

swmnguy's picture

You misunderstood me.  Alpaca tastes good with Ranch [dressing].

Faceberg's picture

Comment of the week nomination. Is there a second?

pavman's picture

Marry a fugly troll lawyer from Illinois and then become governor of Arkansas. The sky's the limit after that.

You will ultimately be successful because everyone will feel sorry for your situation.

any_mouse's picture

Being a bastard son of a Rockefeller [root (((Roche)))] helped.

Billy Jeff was going to succeed in spite of his innate nature. [Like G.A. Custer at the USMA.]

The same people who created a cash business on an airstrip near Mena, AR, made President and Madame Clinton a power couple.

It is as if the Clintons had a Vietnam era MAC-SOG card, the premier get out of jail free card in SE Asia.

The couple skipped their second year of Yale Law and still graduated with their class. [Yale - Skull & Bones. Bush.].

Democrats and Republicans. Spooks behind them all.

silverserfer's picture

if you have a home mortgage, paying extra to principle pays you the percentage of the rate on your loan. 

If your paying 4% and pay an extra $100 a month for 20 years ($24K) that knocks $12,500 of your interest paid. so basickly pay a $1 save 50 cents for every $1 extra you pay on your mortgage. 

GunnerySgtHartman's picture

Exactly, been doing that for years and my mortgage will be paid off in a little over a year - 12 years early!

DivisionBell's picture

I do it but I'm not sure how wise it is to pay extra principal on a 15-yr 2.75%.

On the one hand, I want to pay off that debt as fast as possible so I'm on track to pay it off after 10 years.  On the other hand, it seems like an investment with only a 2.75% return and I wonder if I'd be better off plowing that money into PMs or something else.  Is that a boneheaded way to look at it?





daveO's picture

No. FED inflation is higher.

swmnguy's picture

Look at a good mortgage calculator, that shows progressive amounts paid, both principal and interest, as well as balances due, per month.  One I like is in an Excel format, that you can fool around with:

There are plenty of others.

A house is a different sort of investment.  You need to consider what you'd be paying to live indoors otherwise, and put a value on having an asset by comparison.  There are certainly times and places where owning is not the right move, and some make the argument that there are better returns available.  In my personal circumstance, and frame of mind, getting rid of the debt up front is the better option.  Or at least so I've decided.  YMMV.

pavman's picture

[quote]You need to consider what you'd be paying to live indoors otherwise[/quote]

I think what you really mean is... what you'd pay in comparable rent vs. equity appreciation.

Basically, with housing, you have three choices: cash, pay the banksters their pound of flesh, or pay the landlord his 12oz of flesh.

Either way, rent seekers all around if you don't already have the capital. Owning has hidden liabilities that are more distributed when you rent. Property tax, insurance, maintenance, upkeep. All that shit has to be paid for too ya know. And unless it's a productive asset, most of that can't be written off. What a scam taxation is.

swmnguy's picture

That's right, that's what I meant.

And you're correct, there are a lot of factors to consider.  Not all of them financial, either.  And the financials can vary widely, depending on the exact particulars of your situation and location.

It does become a choice between rent-seekers, if you don't already have the capital.

TheReplacement's picture

Sorta depends on your outlook.  If you have a mortgage and you suspect that property values are way too high then you could be throwing good capital away by paying extra principal when you have a low rate.  The only thing that makes sense to me is that I can't rent for much cheaper than a mortgage so it is just a calculated gamble to have a mortgage instead.  Plus I have privacy.

83_vf_1100_c's picture

  jmo and Dave Ramsey's but if you have debt, you have no business investing yet. Get out of debt ASAP and then worry about what to do with the spare fiat paper. Pay the higher interest crap off 1st then work your way down and just because you pay off that Master Card does not mean you have extra money, it gets rolled over into the next highest interest debt. If happens a lot quicker than you think.

  I'm a stacker myself and I don't count on it as an investment. Look at the past few years of AU/AG prices. Viewed strictly in $ terms I have lost my ass. But every time I open the safe I get a major woody. I came into some cash and need a place to grow it but I can't bring myself to play the markets. I know I will get ass raped. I don't want to invest more in my biz, I am busy as I want to be at this age. Drug dealer to aging hippies would be a profitable gig but prison/ass rape. Never had the problem of too much spare cash before. I did buy more AU/AG and will continue buying my way to the bottom or until they figure out how to go negative prices on PMs.

Justin Case's picture

Inflation also shaves off some value on the principle. The asset rises with inflation, the debt value remains in the original dollars.

walküre's picture

if any of you guys can tell me how I can leverage the deposits in "my own" bank 100x and make loans to the plebs on the planet, then get bailed out when the plebs can't repay the loans I will make you rich!

hedgeless_horseman's picture



The man you seek is Mario Draghi.  

You may find him at the ECB.

any_mouse's picture

Okay, give us your money first.

iinthesky's picture

Whoever wrote this article doesn't have the slightest clue how the banks work. They don't loan deposits, that's illegal. They accept promissory notes in exchange for new cash based on the fractional ratio they're allowed to leverage up to... Money out of this air. Banking 101. Read Modern Money Mechanics published by the Chicago Fed methinks...

DivisionBell's picture

Not much of a howto here.

"You can keep funds in the blockchain, crowdfund a loan, use social networks and mobile apps to change money."

Can you elaborate?

Consuelo's picture