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|10-03-2008, 07:33 AM||#1 (permalink)|
Join Date: Nov 2006
Location: Melbourne, Australia
The global banking credit system is fundamentally unsustainable.
I found out very recently that the banks lend out money of which they mostly do not have. ie. the amount they lend out is much higher than what their customers have deposited. In some cases they do not have any money at all, and are essentially a licence to make money just like that. As they lend out money, it is sent to another (or could be same) bank, and it continues in circulation and artificially (or in a sense, fictitiously) created as people continue to borrow money. The effect is that bankers become extremely wealthy while contributing hardly anything, and an exorbinant amount of money is arificially created in the economic system for as long as people continue to borrow money/ further increase their debt, and buy things.
It is illegal to print counterfeit money, but if you are a lincenced bank it is not illegal to conjure up what never existed in the first place.
$700 billion deal or no deal, i do not think the current banking game can go on forever. The cracks are evident. We can put wall paper over the cracks, but when the paper splits again, i think Canyons will be showing up or faced later rather than sooner. Maybe they have been wall papering for a long time, and behind what we are seeing or starting to glimpse IS the Canyon.
I made inference to the USA by mentioning the $700 billion bail out, but i dont think the crack/ canyon is limited to America. Perhaps more noticeable with the ridiculous size that America's debt has reached, along with their recent events. This economic system/ model is fundamentally unsustainable and also used by many countries. I hesitate to say all countries, but would hazard to guess that it may not be too far of to practically say that it is so.
Money as debt
Also, one could do a google or YouTube search, under " Money as debt", to watch it in smaller files.
|10-03-2008, 12:34 PM||#2 (permalink)|
Join Date: Sep 2008
Completely agree. I work in the investment banking industry, and have met and talked to a lot of the top credit derivatives traders and senior management from Lehman Brothers, JP Morgan, Morgan Stanley etc etc.
I think this is a great opportunity for a restructuring of the banking system, by re-examining the fundamentals of our attitude to debt.
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