posted on Sep, 22 2011 @ 11:06 AM
Originally posted by Shenon
You buy Food with Paper-Money. This Paper-Money is coming from your Bank. The Bank is getting this Money from a Central Bank (by printing more, it
would cause higher Inflation) or from the Market,by buying short term Treasurys,which yield interest,which it can lend to Citizien and
Bussiness,making more Money from those Interests.
This last Option was pretty much killed by the FED yesterday,since it wanted to bring those Interests down...
You see,Banks make no Money = No Money for the Citizien to buy Food
There is NO such thing as no money, dear sir.
The money is only all hoarded up. The bank stocks may had fallen, but the real money is there inside banks. Do remember they do have a limit that they
can use on the stock exchanges for 'investment'.
European banks are the ones most likely to tank badly and may even suffer runs, but not the rest of the world's banks in asia, ME, some US banks,
Economic life still goes on. Ben thankfully did not print more money, thus, the trust in US dollar is still there. And when the job creation bill gets
passed by congress as it will, more money will be circulated and economies revive, not only in US, but the world.
You might wonder where does thses money come from. It came from QE1 and QE2, along with current reserves in US dollars held by nations and rich
individuals that had been hoarded up either in safe international havens, US gov guaranteed bank vaults, homes, etc.