And since they aren't publicly stating the M3 money supply this is crazy! Ok, some things are starting to connect in my brain right now. This means back in 2006 they knew of these problems that were going to hit us and promptly stopped printing the number so they wouldn't let on as to how many dollars were floating around out there. As you can see here
www.shadowstats.com there is a big spike in that M3 number. (look on the right side for the graph) I am curious if someone can explain why there is a drop more recently even though the Fed has been printing money left and right for the banks?
First about the bailout, I am apalled they are making that 10% held in reserve to 0% if I am reading that right. Second, the government knows banks are going to fail. They have to. Otherwise they wouldn't have let the bailout money go to purchase failing banks! This is an outrage in my opinion. Just as bad an outrage that they are giving our tax dollars away for company bonuses and dividends to shareholders.
So, here is what I read somewhere. That Paulson was lobbying for that multiple to be 40x!!!!!!!!! I can't believe it. This says to me that either the banks have gone beyond this multiple as it is, or that the derivitaves (which cannot be effectively valued and are not on the banks books) are severely leveraged due to lack of regulation regarding dervivatives.
So, what is going on in my opinion, is that the banks are covering their asses in a big way because the problem is so bad, and so widespread. (Am I making sense here people?) So, the reason that they aren't lending is because they aren't to their 10% number yet due to overleveraging!!!! They are using this money to make more money in the stock market. It would not surprise me if there is collusion as to when the stock market goes up or when it goes down to make more money to help cover this 10% deposit they are required to have.
Additionally, I have read that there are 1
quadrillion in derivatives in the US and 4
quadrillion in derivatives globally. And now we see why there are so many credit default swaps being issued to these foreign countries. Simply because whatever was packaged and sold as derivatives that originated here are floating around in greater numbers globally. This means that banks world wide may not be at their 10% deposit either. And apparently this is why under the bailout bill we will buy foreign mortgages, credit card debt and auto loans. Apparently we "owe them" big time.
A bank run would be devastating to the stock market, the banking industry, the FDIC and the Federal Reserve. In other words, this is treasonous. Who stands to gain? The nine banks that got the first dole out of the 700 billion? The Fed? Politicians? Shareholders? The very sad part of this whole scheme is, that no one will go to jail. And that all of us will pay for this by continued debt slavery as well as having to foot the bill as taxpayers.
So, this is why the banks aren't borrowing. The problem is too big. We don't even know if the banks are really saying how bad it is (for sure not publicly) but even perhaps to the government. Especially, since the government told the banks to start lending early this week. The Bush Administration is just letting this fester until they dump it on whoever wins the presidency next week in the following year. And they are enriching themselves as a last "thank you" from the Bush Administration. It's sickening.
And this makes me laugh to that all of the pundits, most brokers etc. are saying "let it ride folks!" "don't time the market!" "keep your money in the market/bank!" They really are trying to cover their own asses!!!!
Just remember, the derivatives haven't unwound yet, and neither have the credit card debt, or auto loans, or commercial paper.
If this system fails or there is a run on the banks, God help us. We might have to move to the NAU or have a new currency.
Oh, and check this out, directly copied from the NY fed site (bold is mine):
Read: We create as much fake money as we can get you suckers to borrow.
Here's the link:
http://www.newyorkfed.org/aboutthefed/fedpoint/fed45.html
