Reader comment on: Citi Warns of Withdrawal Gate
Submitted by D Ross (Thailand), Apr 5, 2010 07:57
The article leaves out the salient fact that the US does not print money to inflate the system. The total US dollar notes supplies on the planet are miniscule on comparison with bank created debt.
It's really quite simple. I deposit $100,000 in bank A. Bank A loans out (hopefully) $95,000 to a new customer for a major purchase. Customer buys product and seller deposits the $95,000 in his bank, bank B. Bank B loans $90,000 to its customer and customer pays seller $90,000 which is then deposited in band C. Bank C then…well, you know the drill.
The point is, each one of these debt bombs end up on each bank's balance sheet as an asset. In other words; each bank creates money based on a promise to repay. As long as confidence remains and banks don't over loan, the system works. However, as during the late Clinton years and during all of the Bush years the banks went wild (in the absence of federal restraints) and devastated the US housing market.
This was blatant theft of private wealth – and the kicker is; they're still at it.
Note: Comments are moderated by the editor and are subject to editing.
Submit a comment on this article
Other reader comments on this item
|⇒ Monopoly Money [189 words]||D Ross||Apr 5, 2010 07:57|
|it rememeber... [17 words]||franco||Feb 24, 2010 14:49|
|Aren't reserve requirements enough? [43 words]||Michael Trachtenberg||Feb 24, 2010 09:42|
|Citibank's 7-day notice [121 words]||OurBroker||Feb 24, 2010 06:23|
|Solutions [35 words]||JimmyK||Feb 22, 2010 12:23|
|Thieves [55 words]||Ally||Feb 22, 2010 09:30|
|You have to be kidding [35 words]||used||Feb 21, 2010 20:37|
|Recalculating [84 words]||Mark Herpel||Feb 21, 2010 03:00|
|"It's 'Hard To Believe' a 'Bank' [38 words]||Hard Believer||Feb 20, 2010 19:01|
|Might Break the Law [84 words]||Ken Houghton||Feb 19, 2010 19:50|
|Screw these guys [105 words]||Ron||Feb 19, 2010 16:28|
Comment on this item