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Originally posted by NewThor7
You want me to simplify it for you?
In a fractional reserve system...
For every $1 dollar of National Debt the banks can print $9 dollars in credit.
There ya go!
Originally posted by NewThor7
Originally posted by EarthCitizen07
Originally posted by NewThor7
REAL inflation isn't a problem yet because so much of the liquidity is caught in stocks, bonds, ETFs and in the cayman islands. If that money ever leaves the shelf and finds it's way into the economy....
HYPERINFLATION, bitchez! (not an insult, a zerohedge staple to end your post)
No. It is when you flood the market with money and the money has no correspondence to goods and services bought, that is when hyper-inflation sets in. The fact there is so much money hidden away in unreported accounts means there were too many loopholes being taken advantage of and that the actual progressive taxation system was baloney.
The government could really use every single penny out of circulation, without releasing it into the markets. Besides the federal reserve loans money to the commerical banks and the government does not get involved in banking. The more money government has in its accounts that means the lesser the need to borrow and the lesser the need to tax. Who the hell would oppose it and for what? Well the insanely rich would for obvious reasons.edit on 13/12/12 by EarthCitizen07 because: (no reason given)
What percentage of Americans do you think know what Quantitative Easing is?
And if the Fed loans to Banks at 0% and those banks buy USA Bonds for 1-3% how long can that last?
All of the central banks seem to be getting on the QE bandwagon.
But will this fix anything?
Unfortunately it will not, at least according to Paul Volcker....
“Another round of QE is understandable – but it will fail to fix the problem. There is so much liquidity in the market that adding more is not going to change the economy.”
Sadly, most Americans have a ton of faith in the people running our system, but the truth is that they really do not know what they are doing. Just check out what Dallas Fed President Richard Fisher said the other day....
"The truth, however, is that nobody on the committee, nor on our staffs at the Board of Governors and the 12 Banks, really knows what is holding back the economy. Nobody really knows what will work to get the economy back on course. And nobody – in fact, no central bank anywhere on the planet – has the experience of successfully navigating a return home from the place in which we now find ourselves. No central bank – not, at least, the Federal Reserve – has ever been on this cruise before."
Originally posted by EarthCitizen07
Originally posted by NewThor7
You want me to simplify it for you?
In a fractional reserve system...
For every $1 dollar of National Debt the banks can print $9 dollars in credit.
There ya go!
That simply is NOT TRUE! They are required to keep 10% of the money they borrow from the federal reserve and loan out the rest. I keep seeing this misnomer being passed away as fact by everyone just because they hate banks.
Did printing vast quantities of money work for the Weimar Republic? Nope. And it won't work for us either. If printing money was the secret to economic success, we could just print up a trillion dollars for every American and be done with it. The truth is that making everyone in America a trillionaire would not mean that we would all suddenly be wealthy. There would be the same amount of "real wealth" in our economy as before. But what it would do is render our currency meaningless and totally destroy faith in our financial system. Sadly, we have not learned the lessons that history has tried to teach us. Back in April 1919, it took 12 German marks to get 1 U.S. dollar. By December 1923, it took approximately 4 trillion German marks to get 1 U.S. dollar. So was the Weimar Republic better off after all of the "quantitative easing" that they did or worse off? Of course they were worse off. They destroyed their currency and wrecked all confidence in their financial system. There was an old joke that if you left a wheelbarrow full of money sitting around in the Weimar Republic that thieves would take the wheelbarrow and they would leave the money behind. Will things eventually get that bad in the United States someday?
Of course we are not going to see hyperinflation in the U.S. this week or this month.
But don't think that it will never happen.
The people of Germany never thought that it would happen to them, but it did.
The following is an excerpt from a Wikipedia article about the Weimar Republic. Take note of the similarities between what the Weimar Republic experienced and what we are going through today....
theeconomiccollapseblog.com...
Originally posted by marg6043
Quantitavie easing littler bit of history and how effective has been.,
Many think that this phenomena started with japan but is been tried before with disastrous results by Germany
Why it seems to work for the banksters of today? well because they found a crafty way to create wealth in numbers rather thank in liquidity
A nice lesson from history.
Quantitative Easing Did Not Work For The Weimar Republic Either
Did printing vast quantities of money work for the Weimar Republic? Nope. And it won't work for us either. If printing money was the secret to economic success, we could just print up a trillion dollars for every American and be done with it. The truth is that making everyone in America a trillionaire would not mean that we would all suddenly be wealthy. There would be the same amount of "real wealth" in our economy as before. But what it would do is render our currency meaningless and totally destroy faith in our financial system. Sadly, we have not learned the lessons that history has tried to teach us. Back in April 1919, it took 12 German marks to get 1 U.S. dollar. By December 1923, it took approximately 4 trillion German marks to get 1 U.S. dollar. So was the Weimar Republic better off after all of the "quantitative easing" that they did or worse off? Of course they were worse off. They destroyed their currency and wrecked all confidence in their financial system. There was an old joke that if you left a wheelbarrow full of money sitting around in the Weimar Republic that thieves would take the wheelbarrow and they would leave the money behind. Will things eventually get that bad in the United States someday?
Of course we are not going to see hyperinflation in the U.S. this week or this month.
But don't think that it will never happen.
The people of Germany never thought that it would happen to them, but it did.
The following is an excerpt from a Wikipedia article about the Weimar Republic. Take note of the similarities between what the Weimar Republic experienced and what we are going through today....
theeconomiccollapseblog.com...
Now japan is in number 8 of QEs in order to keep their economy working, but at least Japan produces something.
JPMorgan Chase
Total Assets: $1,812,837,000,000 (just over 1.8 trillion dollars)
Total Exposure To Derivatives: $69,238,349,000,000 (more than 69 trillion dollars)
Citibank
Total Assets: $1,347,841,000,000 (a bit more than 1.3 trillion dollars)
Total Exposure To Derivatives: $52,150,970,000,000 (more than 52 trillion dollars)
Bank Of America
Total Assets: $1,445,093,000,000 (a bit more than 1.4 trillion dollars)
Total Exposure To Derivatives: $44,405,372,000,000 (more than 44 trillion dollars)
Goldman Sachs
Total Assets: $114,693,000,000 (a bit more than 114 billion dollars - yes, you read that correctly)
Total Exposure To Derivatives: $41,580,395,000,000 (more than 41 trillion dollars)
That means that the total exposure that Goldman Sachs has to derivatives contracts is more than 362 times greater than their total assets.
To get a better idea of the massive amounts of money that we are talking about, just check out this excellent infographic.
How in the world could we let this happen?
And what is our financial system going to look like when this pyramid of risk comes falling down?
Our politicians put in a few new rules for derivatives, but as usual they only made things even worse.
According to Nasdaq.com, beginning next year new regulations will require derivatives traders to put up trillions of dollars to satisfy new margin requirements.
Originally posted by kcabmi
reply to post by Mister1k
LOL is right. So....let me get this straight, this guy has gold and silver to sell us, because it is bad to have electronic currency or paper money that can just fade away......so he is going to sell us HIS gold and silver for our paper money and/or electronic currency? That makes a lot of sense.
Originally posted by EarthCitizen07
Originally posted by NewThor7
You want me to simplify it for you?
In a fractional reserve system...
For every $1 dollar of National Debt the banks can print $9 dollars in credit.
There ya go!
That simply is NOT TRUE! They are required to keep 10% of the money they borrow from the federal reserve and loan out the rest. I keep seeing this misnomer being passed away as fact by everyone just because they hate banks.
Common Equity Tier 1 (CET1) capital requirement ranging from 1% to 2.5%, depending on a bank’s systemic importance. For banks facing the highest SIB surcharge, an additional loss absorbency of 1% could be applied as a disincentive to increase materially their global systemic importance in the future. A consultative document was published in cooperation with the Financial Stability Board, which is coordinating the overall set of measures to reduce the moral hazard posed by global SIFIs.
Originally posted by NewThor7
Originally posted by EarthCitizen07
Originally posted by NewThor7
You want me to simplify it for you?
In a fractional reserve system...
For every $1 dollar of National Debt the banks can print $9 dollars in credit.
There ya go!
That simply is NOT TRUE! They are required to keep 10% of the money they borrow from the federal reserve and loan out the rest. I keep seeing this misnomer being passed away as fact by everyone just because they hate banks.
Dude. You ever heard of prop trading?
You REALLY think the banks have to take the 90% and loan it to small businesses?
LOL. That's cute.