Billions and Billions - Yep hear it all the time - Why it will mean something Soon.

Yes, it's a decent article - Would like to know who really wrote it, as it says that the article is open for "editing". Hard to trust anything for the Wiki folks - just about anyone can say whatever they want.

Nevertheless, my point still stands. Do banks have assets besides the money tied up in deposit accounts? Yes or No?

My answer is a definite YES. Banks definitely have huge assets. Have you ever looked at JPMorgan Chase's annual report? How about Bank of America?

Banks have their own cash reserves, real estate that they own, and first lien positions on all kinds of collateral - ranging from real estate, receivables, inventory, equipment, autos, etc. They also have liquid loan loss reserves set aside for loan losses. They have their claws (er, I mean hands) into a lot of different Easter egg baskets.

The suggestion that is always given is this totally fabricated story about how banks "create money out of thin air". That's not true at the local level - I am not referring to the Federal Reserve, which is a whole other enchilada.

At the local level, banks have assets. Lots of them. First, they own tons of real estate. Second, they have investments. Third, they have loan loss reserves, and just plain reserves - money they have socked away for a rainy day many moons ago. This is especially true for the more conservatively managed banks that have been around for 100 years or more. They have accumulated wealth over time, and have a diverse portfolio of loan assets on the books paying interest to the bank every month.

I always hear this silly, insane story about how banks take money from John's account, and lend it out to Bob. Well, guess what? Bob doesn't always pay back. Bob defaults sometimes. You never, ever hear that side of the equation in these silly stories about "magic money out of thin air".

Does the Federal Reserve contract our money supply? You betcha.

Now, ask yourself "Why?". If you understand the Federal Reserve - which is a whole separate topic - you understand that it is an enormously profitable enterprise for some very lucky people that live on this planet. We used to call these folks robber barons, but that's a name from a different era.

My point: Banks have assets. They don't need to artificially play some Mickey Mouse game of "creating money out of thin air". They have money. Lots of it.

The issue right now, as I stated before, with most banks, is that they are clogged with defaulted real estate loans. That's the main issue. I am not even touching on the derivatives mess, which is the main discussion in this thread, other than to say that 1) you need to differentiate between big banks and small banks, and 2) big banks are really heavy into derivatives (especially Chase), but most of your small banks are not.

yess i know this is a dumb question..

why cant the goverment just create 10 trillion dollars with the money printers they have? lol.. then the country is 10 trillion dollars better off.. they should pay all the current loans and morgages off of the citizens.. and give the rest to the banks.. and start again..

lol... yess theres probably a million reasons why this isnt possible.. but i just think its logical lol..

Originally posted by CookieMonster09
Yes, it's a decent article - Would like to know who really wrote it, as it says that the article is open for "editing". Hard to trust anything for the Wiki folks - just about anyone can say whatever they want.

Not to go too far off topic here, but that excuse can be said about any printed article anywhere, especially when anonymous sources are involved. Wiki articles are 100% fine so long as they are cited and the citations are actually accessible and are reasonbly trust worthy. If they state a fact that is not cited, then yeah, take it with a grain of your favorite liquor.

reply to post by emayarsh


Yeah, because that totally worked for the Wiemar Republic
Go do some basic reading on Inflation and the economic circumstances that lead to the rise of Nazi Germany, and you'll understand why printing money at will is idiocy.

The Fed govt nearly shuts down today so they delay it for another month. We're now experiencing HAARP-induced natural catastrophes as decoy from US meltdown.

www.nasdaq.com... eral-government-funding-levels

reply to post by AboveTopSecret1


Notice how the extension included "language allowing the US postal service to defer a $4 Billion payment to it's employees pension fund, the taxpayer will make the payment on behalf of the postal service, which, would MAKE UP THE SHORT FALL FOR THE NEXT SEVERAL YEARS!!!!!!!!!!

I’m all for helping out and all, you know the neighbor down the street who's lights are out, but my stomach turns to think that these crooks take from us and use our money for all sorts of BS programs and back pocket deals and then come to take more to make up for their incompetence.

Money is nothing more than a representation of your buying power and you trade your time and energies, better said, your life for this buying power.

They are stealing your life so they can comfortably live theirs and expect you to give them more if they screw up and can’t pay their bills, while you and yours are expected to live with your "bad decisions"

CORRUPTION
My teeth are grinding involuntarily

Aussy dollar seems to be doing pretty good against all the big currencies.

buying

$0.86 us
$0.94 can
0.54 GBP
0.59 EUR

thats not too bad

so does that mean we dont have as much to worry as the rest?

i am not sure what to think about currency speculation right now. i think we are fast tumbling towards a global currency, most of which is already electronic. just wait a few years - it's probably right around the corner.

if anything, the whole charade of the economic crisis and banking crisis is so orchestrated. this could all be changed in a matter of weeks if the news started to lighten up, companies got back to business, and people started working again - even if it meant working for themselves.

we just need some strong leaders that can take the bull by the horns and turn the situation around. reduce the tax burden, reduce the insane government over-spending, cut the deficit, and give tons of incentives to entrepreneurs - especially manufacturing. instead, our economy is on life support, and no one is doing a thing about it but spending ourselves into oblivion.