Bernanke Wants to Eliminate Reserve Requirements Completely

Bernanke Wants to Eliminate Reserve Requirements Completely

finance.yahoo.com

Banks have always been required to keep a small fraction of the money deposited with them for a reserve, but were allowed to loan out the rest. But now it turns out that Federal Reserve Chairman Ben Bernanke wants to completely eliminate minimum reserve requirements...

So is Bernanke actually proposing that banks should be allowed to have no reserves at all?

That simply does not make any sense...

...what kind of chaos would that lead to?...

What in the world is Bernanke thinking?

(visit the link for the full news article)



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Well this just about takes the biscuit. Who needs enemies when you can go ahead and undermine the entire financial system from the top?

This is not a hyped interpretation: just read the brief MSM article - it's truly mind-blowing!

One is simply lost for words. How can Mr Bernanke claim credibility after this? If it was April 1st it might make some sense.

Check out what the article says about Ron Paul. It's not permissible to quote an article at length, but the quote from RP begins:

"The Federal Reserve in collaboration with the giant banks has created the greatest financial crisis the world has ever seen..."



finance.yahoo.com
(visit the link for the full news article)

One quick bump.

The long and the short of it is this: Bernanke's proposal means the banks won't need to keep in reserve even a tiny percentage of the deposits you put in. Zero percent.

That's one big hole in their ability to return people's deposits.

Normally a very large wave of worried customers is what is required to create a bank run. If these proposals were to go through the banks could say they are unable to return your money at the drop of a hat.

Anyone think this is a little unwise? Like 'fruitcake' unwise.

This raises SO MANY questions for me...

What happens if they loan out all the money and you go to make a cash withdraw? Do they just spit out new money? Use accounting tricks to cover their butts? Do they turn you away? Give you a debit card with that amount on it?

I need to make my own bank so I can print off all kinds of Monopol- I mean Dollars.

If this happens and there aren't any bank runs I'll be really, really surprised.

As if fractional reserve banking wasn't a scam in the first place. This is ridiculous on its face. 'Someone' (guess who they have in mind) has to pay when bets, I mean investments, go bad.

That someone is going to be all the suckers who currently populate amerika. Why else would they even float something like this unless they thought the sheeple were so totally dumbed down that they might be able to get away with it? Thomas Jefferson said Ignorance and Freedom are diametrically opposed.

The price of Freedom was Eternal Vigilance and americans dropped the ball a long time ago. We are just now beginning to feel the consequences of that lapse.

I think at this point Obama could come out and say "Hey, oh by the way, we are screwing you hard, so hard, and you still don't see it do ya?!", literally say that, and people would still sit here and think we are all good. It would be "debunked"...

Hey, Bernanke, thanks for trying now to give the banks absolutely no RISK and taking away any STABILITY we have left in the banking system.

What the??

Has he been sniffing the ink vats they use for printing all that money again?

Here is what he has to say...

FRB Testimony - #9

9. The authority to pay interest on reserves is likely to be an important component of the future operating framework for monetary policy. For example, one approach is for the Federal Reserve to bracket its target for the federal funds rate with the discount rate above and the interest rate on excess reserves below. Under this so-called corridor system, the ability of banks to borrow at the discount rate would tend to limit upward spikes in the federal funds rate, and the ability of banks to earn interest at the excess reserves rate would tend to contain downward movements. Other approaches are also possible. Given the very high level of reserve balances currently in the banking system, the Federal Reserve has ample time to consider the best long-run framework for policy implementation. The Federal Reserve believes it is possible that, ultimately, its operating framework will allow the elimination of minimum reserve requirements, which impose costs and distortions on the banking system

Its like they aren't even trying to hide anymore..

Of course he does. And here's why:

Has Bernanke Perjured Himself?

Things are certainly starting to get interesting.

[edit on 19-3-2010 by projectvxn]

Originally posted by MrBobPhys
This raises SO MANY questions for me...

What happens if they loan out all the money and you go to make a cash withdraw? Do they just spit out new money? Use accounting tricks to cover their butts? Do they turn you away? Give you a debit card with that amount on it?

The debit card; almost seems like a move to a cashless society, with no reserves they can pull it off.
The banks will not dispense cash, just numbers on a card.
Numbers that exist in a computer.

How about the same time eliminating the requirement to trade in use federal reserve notes see what happens. (I would go for silver dollars and canadian maple leafs myself)

Originally posted by Toadmund
The banks will not dispense cash, just numbers on a card.
Numbers that exist in a computer.

Ding! Ding! Ding! You got it!

Soon I expect that somewhere in the fine print of those mind-numbing account agreements will be the stipulation that instead of cash they can just give you a debit card backed by the full faith and credit of the US Treasury.