posted on Oct, 22 2012 @ 08:43 PM
However this seems to assume banks will need to borrow reserves from the treasury... which they most likely will if a lot of their liabilities
aren't repaid before they are forced to fully back those liabilities. My initial misunderstanding was thinking that the Government would pay off a
lot of those liabilities before enacting these new rules, which doesn't seem to be the case... in fact they want the banks to borrow reserves from
the treasury. Then it seems they claim they would use some of the profit generated from that. And that's where the private sector would benefit by
having their debt reduced.
edit on 22/10/2012 by ChaoticOrder because: (no reason given)
Perhaps they mean the banks would be able to lend 100% of assets, and then use the Treasury as their "reserve" in periods of instability and
It seems a bit construed. We should print money with no debt attached and pay off the current debts with it. Eliminate the leverage involved in the
money system and such "money printing" will simply keep us at an equilibrium.
For those that don't understand, by removing the banks ability to create money through credit , and the Fed Reserve ability to through debt (actually
shrinks real money supply), you would be eliminating a bunch of zeros on both sides of all the financial related firms balance sheets. Instead of
reporting 9 billion in assets and 8 billion in liabilities, it would be reduced to something like 900 million in assets and 800 million in
liabilities. Reduces capital from $1 billion to $100 million. This would mean 10 times less money in the economy and deflation that would boggle the
mind. We would go back to the days of a $.25 loaf of bread. thats why I say they can just print the money, Pay off all the debts, and let us start
over with money backed by governments and not quasi central banks.
The next step would be to eliminate federal income taxes. With the governments able to print their own money, they could be self funding. Again not
inflationary because an expanding economy means the need for more money and since the banks won't be allowed to create it any longer it makes sense
for the government to do it.
Mechanisms would have to be put in place to limit spending to things that actually improve the country's well being if it was going to work. I think
in a different monetary paradigm we could come together to reach that objective.