- Why are there banks on every corner?
- What are the functions that banks provide that can’t be managed more efficiently online?
- Why do we have ATMs when “Cash Cards” (like the Hong Kong Octopus) work so well for small transactions and “Bank Cards” like Visa or Wall Mart’s own credit card processing system are so much more efficient than cash?
- Once we get rid of the paper (money) trail and make everything electronic, then we can also radically simplify and improve the efficiency of tax collection.
If we had let the archaic, over leveraged banking system fail the way it was designed to, there would have been more pain that we’re seeing now, but some truly innovative, highly efficient institutions would have emerged and banking could have had a renaissance.
Instead, special interests were allowed to take over…
Jim Rogers has a great interview that he did as part of a 2 hours special on CNBC:
“Banks have been going bankrupt for a few hundreds of years. The world has not come to an end. And Ross, the way the system is supposed to work is that when somebody fails, you let him fail. You let competent people take over the assets. Reorganize the assets and start over again. What we’re doing now is we’re taking the assets away from the competent people and giving them to the incompetent people and saying ‘now you can compete with the competent people with their money!’. This is just propping up the system. This is not going to solve the problem. Do you remember zombie banks from the 1990s in Japan? This is not going to solve our problems at all, we’re going to carry it over and over and over and over again. We’re going to be reporting on this for several more years.”