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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 such?
Except it is bound by a contract, which is mutually binding,
Originally posted by TheBlackHat
yes...correct...or you could continue the current model..of living on credit... having a few boom years...then having a massive economic collapse because you couldn't pay back all the money you borrowed in the first place...
Originally posted by proximo
While I more or less agree that in the long run forcing banks to only be able to lend money they actually have is a real solution, the idea that this can be done without a horrendous depression being incurred is absolutely stupid.
There is no magical fix for the debt the whole the industrialized world is in. Its as simple as this there is more debt than can be paid back - therefore many debt holders are going to be screwed. Whether you realize it or not that means everyone will be effected, either through higher taxes, no jobs, higher prices, loss of bank deposits or retirements, cutting of government programs, some way some how everyone is going to feel a LOT of pain.
Also no human on Earth can stop the US economy from failing, short of starting a war of conquest that would kill millions. We are simply too far in debt, don't believe Romney or Ryan when they say they can fix the economy - they can't and they know it. Ryan has the audacity to claim we can grow the economy 5% a year twenty years straight. We have not grown 5% two years straight since the early eighties, and never twenty straight, even when we really were a superpower. Even if we could do that which will not happen he is unwilling to make any real cuts, and without some that would still not be enough to balance our yearly budget let alone start to pay off the existing one.
We cannot dig ourselves out now, the hole is just to deep. The only fix is to go through the depression and discharge the excess debt NOTHING ELSE will work.
There is no real magic and it will not go away, prepare accordingly.
edit on 22-10-2012 by proximo because: (no reason given)edit on 22-10-2012 by proximo because: (no reason given)
it's possible that the reason why fannie and freddie and the fed are buying up all these mortgage backed securities is that it's the only way they can legally foreclose, and possibly declare a property free of any debt owed to it. because at the moment, I don't think anyone knows just who owns the note to any piece of real estate unless it's paid in full, and even then, some without any debt connected have been foreclosed, or at least they attempted to foreclose on them!!!
Originally posted by boncho
Originally posted by magma
So what is the outcome for somebody who has a house mortage that they will repay over the next 20 years?
Will assets be revalued to suit the plan?
I think that's a very good question. What happens to real estate and other hard asset values. And most importantly, why is this coming out of the IMF? If it's not favourable to them, why bother publishing the study results. We are talking about a private corporation after all, not a public one.
And, with the latest downturn, there has been a massive redistribution of wealth (which made the downturn seem manufactured in my opinion). How does that fit into this whole thing?
The IMF will not support anything unless it and it's stockholders are coming out on top. Very interesting indeed.