Sir, – following the OFTs high court defeat over odious bank charges last month, a member of the banking aristocracy, Simon Hester, boss of RBS, felt sufficiently secure to be able to lecture the public that there is no such thing as a free lunch.

However, a Daily Mail analysis of overdraft charges concluded that banks are charging more than back street moneylenders and payday loan companies, siphoning £8.3bn a year from customers’ accounts.

If we also consider the public debt resulting from the massive redistribution of wealth to bank shareholders and their top executives through welfare state bailouts and bonuses, we can only wish Mr Hester a safe return from whichever planet he currently resides on.

Yet there is a more fundamental reason to doubt this banker. He is a member of a group who have undoubtedly enjoyed a free lunch. They are known as counterfeiters.

We intuitively understand why counterfeiting is wrong. By creating money out of nothing, it takes directly from those receiving fraudulent money and indirectly from everybody, as it devalues existing money by inflating the money supply. When a bank makes a loan it creates digital money in a customer’s account and used to buy something.

The seller then deposits that debt-money in the same or other bank. Keeping a small proportion in reserve, that second bank will use the majority of that deposit as collateral for another loan, which will become a deposit in another bank and so on.

At the pre-credit crunch reserve ratio of 3/100, the banking system could profit from inflating a £100,000 loan into a £3,200,000 bubble of interestbearing debt. This duplication is known in polite financial circles as the multiplier effect and is responsible for creating 97 per cent of the UK’s so-called money supply.

Unfortunately, this idiotic system doesn’t create the money to repay the banks’ interest charges, so there is never enough money available to repay the debt. Insolvency is only kept at bay if more first timers buyers can be enticed or the nanny state blackmailed into creating more money as debt.

Yet no matter how much an economy grows, by the miracle of compound interest, the debt burden will grow exponentially until eventually it becomes unrepayable and the Ponzi scheme begins to unravel.

This built-in bankruptcy is now throwing people out of their jobs and homes and condemns innocent future generations to feudal debt slavery.

Time for a change? Visit www.Call4Reform.org.

RICHARD AKERS Topcliffe Road, Thirsk.