posted on May, 2 2010 @ 10:04 AM
Originally posted by FritosBBQTwist
reply to post by babybunnies
Banks can increase the money supply of the economy by the multiplier. To increase it further, as I understand, there needs to be money thrown in by
the federal reserve. Of course, this follows my basic and legal understanding of the banking system.
Who knows if something else goes on.
So...can you explain to me what YOU mean?
i don't know whats going on with this rash of multiple posts...
even before i'm finished with my text reply.
Now; to get my input on record....
as to increasing the multiplier,
To increase it further, as I understand, there needs to be money thrown in by the federal reserve
the bank itself was able to create collateral to therefore increase the ammount of money it can lend out (at risk)
creative banks like MS & GS found out that creating derivatives, CDO
s and other exotic paper ->> is just like creating money out-of-thin-air,
and they can then increase their allowable fractional reserve holdings so they will be able to lend out 40X70X or more times their deposit base their
charter allows them to lend.
up till the crisis overloaded the financial indudstry and the TARP fund was created... only the FederalReserve was permitted to creat money
but since then, the FED, & Treasury has effectively given these financial elites the privledge of creating money by endorsing the faulty/& mostly
fraudulent 'paper' aka CDOs, swaps, derivatives and other abstract Bonds as being 'legal tender' that has a value of 100 cents to the dollar of
Federal Reserve Notes
i do say this is nothing other than counterfieting by the likes of the 12 or so elite/too-big-to-fail institutions that are hiding under the cover of
being labled 'banks'.
this is not some abstract rationalization, operating in a theoretical economist domain... these are all "king-pin" criminal activities, imho
[edit on 2-5-2010 by St Udio]