Follow The Bottom Violation
-
Mar
19
Bernanke and Fed to Eliminate Reserve Requirements?
As if the United States debt woes weren’t dire enough already, now Ben Bernanke and his evil henchmen are planning to eliminate reserve requirements in the banking system. Let’s be clear about what this means: the United States government has been borrowing its way out of every single crisis for 100 years. Now we are up to our eyeballs in debt — levels never before seen in history, speaking in real terms. More currency is being printed than ever in history. Interest rates are being kept artificially at historical lows. Banks — encouraged by the government — lent trillions of dollars to people who couldn’t afford to buy homes. A bubble formed because of artificial demand created by the government.
Now this same government, in an attempt to stimulate lending (again), is encouraging banks to leverage themselves 100%. The absurdity is stupefying. I’m absolutely floored that the Chairman of the Federal Reserve actually proposed ending fractional reserve banking. We have entered a new era, indeed…
Thanks to Gino Verza for his help on this one.
Having trouble with RSS? Click here.
Disclosures: Paco is long TBT, UCO, and gold. He also holds U.S. dollars by necessity, pending the advent of private gold-backed currencies.
You can buy his novel Discipline wherever books are sold.
3 Comments so far
Partners
Paco,
I am honored to be mentioned.
Gino
Unbelievable, the same type of deregulation thinking that has us in this mess now.
Deregulation didn't get us into this mess. Governmental borrowing and artificial demand got us into this mess. If you don't understand what happens to demand when the government facilitates leverage, then you're not arguing from a position of strength. Healthcare, housing, and tuition are prime examples of how artificial demand distorts the economy.