It's a big mess and the rate cuts won't solve the problem. They actually create a large part of the the problem though Wall Street lending practicies of CDS garbage was the real kicker. The banks are not lending to each other because no one knows who is solvent. Would you lend money to someone you think is going to go bankrupt? The other reason they are not lending is they themselves are likely not solvent. This is why credit is so very dangerous, especially when manipulated by politics.
banks/lending/credit=usury=inflation=unemployment=unequal redistribution of wealth=lower wages=war, repeat cycle and change word for 'usury' to 'interest'
Yes-there is a cycle. The boom,bust, consolidation. Mixed with some purple Kool-Aid and you have the business cycle in a nutshell. Although currently there is a type of "controlled Demolition" in the Bust cycle.
Banks are being "bailed out" just so that they can meet their solvency/capital ratio of deposits, which in the real world they are Bankrupt/Insolvent only that they have not declared it. They will go bust, but the bail-outs are nothing more then time-extensions and added debt
It's a big mess and the rate cuts won't solve the problem. They actually create a large part of the the problem though Wall Street lending practicies of CDS garbage was the real kicker. The banks are not lending to each other because no one knows who is solvent. Would you lend money to someone you think is going to go bankrupt? The other reason they are not lending is they themselves are likely not solvent. This is why credit is so very dangerous, especially when manipulated by politics.
LuciusBrutus 3 years ago
banks/lending/credit=usury=inflation=unemployment=unequal redistribution of wealth=lower wages=war, repeat cycle and change word for 'usury' to 'interest'
subvertio 3 years ago
Yes-there is a cycle. The boom,bust, consolidation. Mixed with some purple Kool-Aid and you have the business cycle in a nutshell. Although currently there is a type of "controlled Demolition" in the Bust cycle.
Banks are being "bailed out" just so that they can meet their solvency/capital ratio of deposits, which in the real world they are Bankrupt/Insolvent only that they have not declared it. They will go bust, but the bail-outs are nothing more then time-extensions and added debt
StandardJohnDoe 3 years ago