Quick look into how the banking system works

[NoDrama]

Han, they just credit the account, they don't actually move money. The original deposit is still in the original bank because they do not pay out loans from the money they receive in deposits they just credit the account. THE CREDIT IS THE MONEY BEING CREATED!!!!!!! Money IS debt.

I mean don't take it from the bankers, hell what do they know about banking right?

 

[NoDrama]

As clearly as I can, it is impossible for a bank to turn a $1000 deposit into a $10,000 loan, it can only loan out $909. But through people spending the money, depositing it into their banks, and those other banks lending it out, by the time this process goes to the end that $1000 has been used to purchase about $10000 worth of stuff, but the stuff is owned by the people paying back their loans.

OMG you are almost there!! YES YES YES!! Keep those wheels turning, it will come to you any moment now.

 

[NoDrama]

Got this from here http://en.wikipedia.org/wiki/Bank_run

Under fractional-reserve banking, the type of banking currently used in developed countries, banks retain only a fraction of their demand deposits as cash. The remainder is invested in securities and loans, whose terms are typically longer than the demand deposits, resulting in an asset liability mismatch. No bank has enough reserves on hand to cope with more than a fraction of deposits being taken out at once.

 

[hanimmal]

OMG you are almost there!! YES YES YES!! Keep those wheels turning, it will come to you any moment now.

Ok so now if you would, please reread the original post that I had made (page one) and tell me this is not what I have been saying all along. This is exactly what I had said.

Hopefully we get past this soon, so we can go onto different things. It seems like we are focused on the right part now, we just need to fine tune it.

Han, they just credit the account, they don't actually move money. The original deposit is still in the original bank because they do not pay out loans from the money they receive in deposits they just credit the account. THE CREDIT IS THE MONEY BEING CREATED!!!!!!! Money IS debt.

I mean don't take it from the bankers, hell what do they know about banking right?

I see what you are saying, the money is still being shown in the original person's account, always true, so the amount lent is not taken out of that persons deposit account (on paper, you can at least budge that the amount they owe to the depositor doesn't mean that they did not give it to another customer). That deposit is still where the thread is tied to. That original deposit is what makes everything fit into place, whatever amount that was, the bank cannot lend out more than 90% of it, they are forced to hold the reserves for the person to come in and grab some cash as needed.

And most importantly at no point can there be more than the original deposit outstanding (in cash).

Because lets go back to the original deposit of $1000, that is all the bank has. They loan $909 to person 1, let's say he leaves it in his account, and the bank makes a second loan off of it for $826. (both dropped by 10% for the RR).

Now person 1 and person two decide they need their money, and withdraw it, now the bank is -$735 which is far less than the 10% they are forced to have, and now deemed bankrupt, the FDIC swoops in and sells it to another bank that doesn't do this bad business practice.

This is the crux of what I am saying, that banks cannot operate this way, because they will go bankrupt. They may technically be able to, and in order to expedite a loan at times they may, but it is because they have well above RR and unless there is severe calamity (like we just went through) where everyone panics and withdraws all their money, they keep our money safe and growing.

 

[NoDrama]

Now person 1 and person two decide they need their money, and withdraw it, now the bank is -$735 which is far less than the 10% they are forced to have, and now deemed bankrupt, the FDIC swoops in and sells it to another bank that doesn't do this bad business practice.

Please tell me how a bank can give you NEGATIVE cash. If they don't have it you can't get it. IE it has been stolen from you. Kapish?

The FDIC does not sell banks, it covers the deposits up to 1/4 million. What it does it swoops in and shuts the bank down, then gives the insured deposits to the depositors. Anyone who had more than 250k in their account is fucked and will not get their money back. The bank will be put up for sale, and the FDIC will manage the receivership. They don't do anything else. Not every bank gets sold, most just die. Last year 165 banks died. This years estimate is around 250. You only need 11% of the deposits demanded to completely ruin a bank and leaving it with no money at all. For you see the money creation scam also works in reverse and for every dollar in loans that is paid off nearly $10 of created money is destroyed.

Remember it goes back to the days of Goldsmiths loaning the WAREHOUSE RECEIPTS of gold that did not exist. As long as no more than 10% of the deposits were demanded at any one time, he could always cover his fraud.

How can you loan money that is still in the original account? You can't, instead you just make some credits in the account and there you go, money created.

I am legally entitled to my whole 100% deposit at any time I wish and if everyone went and demanded their deposit at the same time, the bank would only be able to cover 10% of it. Its called a "bank run" or a "Run on the Banks". Do you get it yet? The VAST majority of money was "CREATED" and loaned out at interest.

Consideration is the legal concept of value in connection with contracts It is anything of value in the common sense, promised to another when making a contract. It can take the form of money, physical objects, services, promised actions, or even abstinence from a future action. If either promisee already had a legal obligation to render such payment, it cannot be seen as consideration in the legal sense.
In common law consideration it is a prerequisite that both parties offer some consideration before a contract can be thought of as binding.


If the banks create money from Credit, then there is no legal consideration. Therefore loans are not really legally binding contracts since the bank does not have any actual physical consideration.


Do you get it yet?

 

[hanimmal]

Do you get it yet?

I have always gotten how the system works!

This I guess is akin to two people walking up on a Dog, on is scared to death of it, and the other is not.

The one says: "it is just a dog"
And the other goes "Exactly, it is a dog!"

They are both right. I get that the dog can bite me, but I also understand how it operates, and know that it is not scary unless people start to do the wrong thing (wow are we talking about guns?).

Quote:
Originally Posted by hanimmal

Now person 1 and person two decide they need their money, and withdraw it, now the bank is -$735 which is far less than the 10% they are forced to have, and now deemed bankrupt, the FDIC swoops in and sells it to another bank that doesn't do this bad business practice.

Please tell me how a bank can give you NEGATIVE cash. If they don't have it you can't get it. IE it has been stolen from you. Kapish?

Exactly! They cannot! Didn't you see that in the next sentence I said this:

This is the crux of what I am saying, that banks cannot operate this way, because they will go bankrupt. They may technically be able to, and in order to expedite a loan at times they may, but it is because they have well above RR and unless there is severe calamity (like we just went through) where everyone panics and withdraws all their money, they keep our money safe and growing.

I mean seriously this is what people need to understand, when you go to a bank, you are purchasing a service, they are not magically giving you interest on your accounts, they are lending your money and getting interest for that loan! That way you have incentive to keep the service going, and the bank wins, and the person that gets what they need wins.

This is what truly makes america wealthy, we are the worlds bankers! They are getting better at it, but we still are far and away the wealthiest, no other country can do what we do. That is why things like our export import deficit do not scare me, because we are so far ahead.

If I am going to sell something to a very wealthy person, they are not going to worry if there is an imbalance of trade, if I can get them what they want for less than anyone else (or themselves) they will buy it from me, and use their money for something else that will make them more money. The power of trade!

 

[hanimmal]

For you see the money creation scam also works in reverse and for every dollar in loans that is paid off nearly $10 of created money is destroyed.

This is one of the cooler concepts that I had to really think about.

When you pay off that loan, you are right, that is $10 that is destroyed (of course excess reserves handles this, but still we are doing models here right!).

But that loan you just paid off, that freed up money that the bank that just got the loan paid off is now able to lend again, which can now move through the economy and build back up eventually to the $10.

This is fantastic stuff!

 

[NoDrama]

I think I figured out where you are stumped. When You go get a loan at a bank to buy a house you get a big fat check to give to the nice real estate company and they give you the keys to the house. Now, you borrowed a bunch of money (lets say $200K) and you agree to pay all that money back +5% interest. OK, now to get that money someone had to make a deposit of $220K right? ok good. So now heres what happens and really think about it. The guy who deposited the 220K comes to get all his money back, but how much does the bank have? Well if we went by your understanding we only have 20K , because 200k went out to buy the house right? They are just able to cover it because there are a lot of depositors right? Wrong, the bank has the whole 220K even though the check to the real estate co. was cashed because the account is just numbers they put in there. So now the guy gets his 220K and goes home with it. Meanwhile the bank still has the consideration ( Your Mortgage) and therfore still meets the reserve requirements. Meanwhile the real estate company has cashed the check and made a Deposit of 200K in some bank account somewhere and then the process starts all over again. 200K was "Created" and given to the real estate company and they will in turn be able to make another loan upon it over and over until the amount gets so small the bank can no longer make a profit. In that process approx 10 times the original amount of the deposit will have been created in CREDIT! and we all know credit spends just like the dollar does, because they are both really just debt.

I hope that made sense, I just smoked a great big fat pipe full of hash and bud.

 

[NoDrama]

I have always gotten how the system works!

This I guess is akin to two people walking up on a Dog, on is scared to death of it, and the other is not.

The one says: "it is just a dog"
And the other goes "Exactly, it is a dog!"

They are both right. I get that the dog can bite me, but I also understand how it operates, and know that it is not scary unless people start to do the wrong thing (wow are we talking about guns?).

Exactly! They cannot! Didn't you see that in the next sentence I said this:
I mean seriously this is what people need to understand, when you go to a bank, you are purchasing a service, they are not magically giving you interest on your accounts, they are lending your money and getting interest for that loan! That way you have incentive to keep the service going, and the bank wins, and the person that gets what they need wins.

This is what truly makes america wealthy, we are the worlds bankers! They are getting better at it, but we still are far and away the wealthiest, no other country can do what we do. That is why things like our export import deficit do not scare me, because we are so far ahead.

If I am going to sell something to a very wealthy person, they are not going to worry if there is an imbalance of trade, if I can get them what they want for less than anyone else (or themselves) they will buy it from me, and use their money for something else that will make them more money. The power of trade!

AHA so you DO get it. You DO understand that it is a fraud, the banks don't actually have money, they just have credit.

 

[NoDrama]

This is one of the cooler concepts that I had to really think about.

When you pay off that loan, you are right, that is $10 that is destroyed (of course excess reserves handles this, but still we are doing models here right!).

But that loan you just paid off, that freed up money that the bank that just got the loan paid off is now able to lend again, which can now move through the economy and build back up eventually to the $10.

This is fantastic stuff!

Your getting it now!!!

Now here is the real kicker, the one that your really going to have to think about. They don't create the interest. If every Loan was paid off, there would be NO MONEY left. BUT and heres the Crux of it. WE WOULD STILL OWE THE INTEREST. You can never pay the interest off, because it never gets created. It is a self fulfilling prophesy of credit expansion and unpayable interest that keeps the masses enslaved. For if you and I could garner profit from nothing ( the Interest charged on the Credit ( Nothing) that they created in your account) wouldn't that be an excellent way to get very very rich?

I wish I could find that video of the Fed Reserve Representative explaining how the interest is never created. Its on the net here somewhere.

Excess reserves very rarely happen. Banks are penalized by the Fed for having excess reserves. ( Not Always ). The fed must constantly expand credit, and therefore the money supply must also expand. Inflation is always a given, over time inflation will make every dollar worthless.

And that's why gold is so important.

 

[hanimmal]

I hope that made sense, I just smoked a great big fat pipe full of hash and bud.

Lmao I always worry about this when I am typing after doing the same.

AHA so you DO get it. You DO understand that it is a fraud, the banks don't actually have money, they just have credit.

I have always gotten how the system works man, I will not go as far as to call it fraud, but I understand the idea of credit.

I am just saying people should know how this works (why I made this thread in the first place!). That when you put your money into a bank, they are not doing something nice for you, they are providing you a service. We allow banks to lend out our money and in turn they work hard to mitigate our exposure to risk, and for allowing them to do this, we get back interest. And that way everyone wins.

I think I figured out where you are stumped.

Cool I am on board, lets get to the bottom of this!

When You go get a loan at a bank to buy a house you get a big fat check to give to the nice real estate company and they give you the keys to the house. Now, you borrowed a bunch of money (lets say $200K) and you agree to pay all that money back +5% interest. OK, now to get that money someone had to make a deposit of $220K right? ok good.

We are good.

So now heres what happens and really think about it. The guy who deposited the 220K comes to get all his money back, but how much does the bank have? Well if we went by your understanding we only have 20K , because 200k went out to buy the house right?

Yup, with you.

They are just able to cover it because there are a lot of depositors right?

Correct!

Wrong,

*&%^&*^ (jk!)

the bank has the whole 220K even though the check to the real estate co. was cashed because the account is just numbers they put in there.

Ok so let's pretend he used cash for this original 220k deposit.

Here is what happens from there (feel free to find holes, we are having fun now eh!)

When he deposited it, the bank if it had sufficient vault cash, would have moved it to the Fed reserves, because it really has no need for that kind of cash. And they add it to their Excess Reserves (ER from here on out cool)(located at the Fed).

So when I take my loan of $200k and give the check to real estate co. They deposit the check. And then instead of moving money all around the country (or inventing fake money), the Fed moves the Excess Reserves of bank 1 and puts the 200k into real estate co.'s account.

So now the guy gets his 220K and goes home with it.

They will issue him a check, that he will deposit, and the Fed will have to move the ER that bank1 has, if it doesn't have enough ER to cover it, the bank better get a loan from another bank for a couple days until they do, or they will be bankrupted and sold.

If the dude wants cash there is a large withdraw clause that means he will have to wait a couple days if they don't have enough vault cash.

Meanwhile the bank still has the consideration ( Your Mortgage) and therfore still meets the reserve requirements.

This I admit, I am unaware of. Are you certain that a mortgage is considered a reserve requirement? Not that it blows away what I am saying if it is, but I am guessing if so this came from the glass-stegall act being revoked, and shadowbanking system rolling in. I will have to do a bit of looking into this.

What I am saying would show why the banks were in love with the idea of selling the 'bundled mortgages' (asset backed securities I believe they were called) to wallstreet. Because it allowed them to get the money back instantly so they could then turn and sell more loans. That is why quick loans exploded, and all the non bank (shadow banking) banks popped up and sold everyone and their dead uncle a mortgage. Because wallstreet was buying them, freeing up their reserve requirements, and allowing it to skyrocket in just a few years.

I would think that in the case of mortgages it would be considered a investment, and would therefore not be a part of reserve requirements (because homes are no longer a part of M1, M2 or M3). But interesting, are you 100% about this?

Meanwhile the real estate company has cashed the check and made a Deposit of 200K in some bank account somewhere and then the process starts all over again.

I agree with this, but the above is different.

200K was "Created" and given to the real estate company and they will in turn be able to make another loan upon it over and over until the amount gets so small the bank can no longer make a profit. In that process approx 10 times the original amount of the deposit will have been created in CREDIT! and we all know credit spends just like the dollar does, because they are both really just debt.

This is where we diverge again.

I think we finally hit it.

You feel that the RR of the first step, is simply the bank holding the original deposit in its vault, and making a loan based on it (without actually moving any money).

And I am saying that the deposit is moved to the Fed and kept as excess reserves, until the real estate company cashes my check, and then the Fed moves it to their ER.

My assumption is based on the bank understanding that if the dude pulls his money out, the bank is below RR, and not able to function and is bankrupted.

Yours is that the bank is able to simply pay him back (because it never used any money from his deposit).

Am I right on our difference?

 

[NoDrama]

FWIW I took 6 semesters Of accounting and can figure out amortization schedules in my head, but still can't do my taxes correctly. Every year I somehow goof something up and they want just a lil bit more money from me.

 

[hanimmal]

Excess reserves very rarely happen. Banks are penalized by the Fed for having excess reserves. ( Not Always ).

This changed a couple years ago, they now pay a small interest (the fed does) on ER and RR.

http://www.federalreserve.gov/monetarypolicy/reqresbalances.htm

The Federal Reserve Banks pay interest on required reserve balances--balances held at Reserve Banks to satisfy reserve requirements--and on excess balances--balances held in excess of required reserve balances and contractual clearing balances.

They don't create the interest. If every Loan was paid off, there would be NO MONEY left. BUT and heres the Crux of it. WE WOULD STILL OWE THE INTEREST. You can never pay the interest off, because it never gets created. It is a self fulfilling prophesy of credit expansion and unpayable interest that keeps the masses enslaved. For if you and I could garner profit from nothing ( the Interest charged on the Credit ( Nothing) that they created in your account) wouldn't that be an excellent way to get very very rich?

Here we start to move away again, but its all good, we will come back. The interest is the inflation in the system. With people working and using the loans to build new things and grow wealth, the interest gets paid back.

If a dollar tomorrow is not going to be worth the amount today, I know that I need to invest it, to use it to make it become 2 dollars (or 1.04 to stay ahead of inflation). That is why we invest as a country. If we all kept our money out of circulation new businesses would not be able to borrow as easily, and we would not have as much innovation (historically or today).

Sure there would not be as much junk produced, but through all those bad ideas, we get some truly remarkable ones that make up for it.

 

[hanimmal]

FWIW I took 6 semesters Of accounting and can figure out amortization schedules in my head, but still can't do my taxes correctly. Every year I somehow goof something up and they want just a lil bit more money from me.

lmao, so will you forgive me for multiplying all those numbers by trying to find what they were 10% of, before instead of multiplying by ten?

 

[NoDrama]

When he deposited it, the bank if it had sufficient vault cash, would have moved it to the Fed reserves, because it really has no need for that kind of cash. And they add it to their Excess Reserves (ER from here on out cool)(located at the Fed).

So when I take my loan of $200k and give the check to real estate co. They deposit the check. And then instead of moving money all around the country (or inventing fake money), the Fed moves the Excess Reserves of bank 1 and puts the 200k into real estate co.'s account.



They will issue him a check, that he will deposit, and the Fed will have to move the ER that bank1 has, if it doesn't have enough ER to cover it, the bank better get a loan from another bank for a couple days until they do, or they will be bankrupted and sold.

If the dude wants cash there is a large withdraw clause that means he will have to wait a couple days if they don't have enough vault cash.

I forgot to put in the epiphany sentence LOL you know how it is. The total amount of cash withdrawn from the bank is $420,000!!!!

220K from the depositor taking his cash out, and 200K from the check drawn upon the account. 200K was "Created" and its totally legit and legal. The bank now only has to come up with 20K to cover its RR, which is easily borrowed from the fed at an overnight rate of almost nothing. or Your mortgage can easily be sold to another bank for face value ( Happens very freq nowadays)Soon enough a deposit will be made, interest earned, or profit made to cover the RR at almost no cost to the bank. How easily the fraud is committed. and all the while you will ultimately have paid the bank a total sum, of $386,510.40 for the privilege of borrowing $200,000 from them( and thats at 5% which is historically near the lowest interest rate ever). A tidy profit, and especially handsome when you consider how many times you can do it. And its all done with money that doesn't exist. Its how banks and the Fed can leverage the citizen by a 10 to 1 margin upon anything we do, for it is their system and was designed to enrichen them and them only. Their power is great, but one thing is kryptonite to them, care to guess what that is?

 

[NoDrama]

This changed a couple years ago, they now pay a small interest (the fed does) on ER and RR.

http://www.federalreserve.gov/monetarypolicy/reqresbalances.htm



Here we start to move away again, but its all good, we will come back. The interest is the inflation in the system. With people working and using the loans to build new things and grow wealth, the interest gets paid back.

If a dollar tomorrow is not going to be worth the amount today, I know that I need to invest it, to use it to make it become 2 dollars (or 1.04 to stay ahead of inflation). That is why we invest as a country. If we all kept our money out of circulation new businesses would not be able to borrow as easily, and we would not have as much innovation (historically or today).

Sure there would not be as much junk produced, but through all those bad ideas, we get some truly remarkable ones that make up for it.

Your right about the RR, thats why I said not always, because during crises the Fed can help prop the banks up by letting them create excess reserves and get more free money from nothing to cover all the defaulting loans. You were smart to call me on it, but I was smarter in PRE mentioning the small print. For 95% of the last 97 years excess reserves were penalized.

Investing is gambling, period. There is only 1 thing that you can invest in that is guaranteed to hold its value ( Im not talking about ideas here, something physical).

If the interest were the same as the inflation rate explain this :

see that thing called liquidity crisis( The really low part of the graph). Are you trying to tell me interest rates from the banks were averaging in the negatives? Laughable. Interest rates are not tied to inflation rates in any kind of a proportional way, as interest rates go down, the amount of money created (Inflation) is increased. As money becomes cheaper to borrow, the more money that is borrowed. Basic stuff you slept through in class?

 

[NoDrama]

You were smart to call me on it, but I was smarter in PRE mentioning the small print.

That part came out wrong, Im not trying to act superior or elite in any way. I apologize if it came out that way.

 

[hanimmal]

That part came out wrong, Im not trying to act superior or elite in any way. I apologize if it came out that way.

Nah I was going to joke about it too, before I saw this, so you scooped me!

 

[hanimmal]

220K from the depositor taking his cash out, and 200K from the check drawn upon the account. 200K was "Created" and its totally legit and legal. The bank now only has to come up with 20K to cover its RR, which is easily borrowed from the fed at an overnight rate of almost nothing. or Your mortgage can easily be sold to another bank for face value ( Happens very freq nowadays)Soon enough a deposit will be made, interest earned, or profit made to cover the RR at almost no cost to the bank. How easily the fraud is committed. And all the while you will ultimately have paid the bank a total sum, of $386,510.40 for the privilege of borrowing $200,000 from them( and thats at 5% which is historically near the lowest interest rate ever)

I just don't see why your saying this is fraud?

Everyone that has money and puts it into a bank have access to this information upfront. Everyone profits from this system.

If I tabulated out 200k and figure out the future earning that it would earn me if I had invested it now at 5% over 30 years it would be the $386,510.40 you calculated.


So why should I not pay this back? I would have every opportunity to use my money earned to pay it off faster and get a lot of that money back. But what generally happens is that you will have better things to invest in that will earn you more than the 5% you are paying on your home. Like a 401k, which is getting you a few% higher + employer matches and + government not collecting taxes on it.

The bank has just allowed me to use their 200k now, and put all my money to building up more wealth than what I am losing. So I am gaining, the bank can wait me out while I am paying it back (loooong term right) so they are making out, and the people whose deposits are being used are getting interest back into their accounts that is incredibly safe. So win, win, win.

A tidy profit, and especially handsome when you consider how many times you can do it. And its all done with money that doesn't exist.

This is where we disagree, I am not convinced that this is possible. My understanding is that banks cannot lend off a mortgage, and that is why the shadowbanking system coming up with the financial innovation of selling the bundles (asset backed securities) of mortgages to wallstreet excited the banks so much, because it meant they could dump these long term investments they had made (passing the buck! <-- pun!) in order to free up their money to jump onto the bandwagon of giving everyone mortgages that would vary and make them more money.

I am saying they can only do this once per bank. Once that money is lent out, that bank is done (all they have left is their RR, the Fed moves the ER to the next bank).

Its how banks and the Fed can leverage the citizen by a 10 to 1 margin upon anything we do, for it is their system and was designed to enrichen them and them only.

Again I disagree, the Fed and the Banks cannot force us to borrow.

We are the only ones that can move money around. You really do come off sounding like a communist! The people are the ones coming to take out the loan, and they usually have the means to do so. Buying something that you can afford long term but don't have the funds short term is not a bad thing.

We have evolved as an economy, and at times we need to catch up to the financial innovations (like how fast shit can move now with credit cards and internet), but it useful or it would not have been invented.

ps. I know your no commy, it was a joke! We should be fine to make jokes at eachother, I won't take it personal if you have a go at me sometimes, we will just have to keep in mind that it is a person on the other side of the conversation.

Their power is great, but one thing is kryptonite to them, care to guess what that is?

Stupid politicians that don't understand economics (or math in general) and do stupid shit like raise taxes while cutting government spending (hoover) in order to cut the gov't deficit while the great depression was happening.

because during crises the Fed can help prop the banks up by letting them create excess reserves and get more free money from nothing to cover all the defaulting loans.

The excess reserves was designed (and argued about for decades) to give banks incentive to take less risk and keep ER. Because before when the ER wasn't there they would lose money that was not invested (through inflation) so that was an opportunity cost, and they would have more risk on their books. This was designed to curb that behavior.

And look at what happened after this changed (Most of this increase is the bank loans under bush to stop the collapse, so it will be very interesting to see how this changes over the years to come).

If the interest were the same as the inflation rate explain this :

see that thing called liquidity crisis( The really low part of the graph). Are you trying to tell me interest rates from the banks were averaging in the negatives? Laughable. Interest rates are not tied to inflation rates in any kind of a proportional way, as interest rates go down, the amount of money created (Inflation) is increased. As money becomes cheaper to borrow, the more money that is borrowed. Basic stuff you slept through in class?

I apologize I cannot really see your graph to decipher what it is saying, I know about the liquidity trap, but first check this out. If you follow the expected inflation rate, that is how interest rates are determined.

If you are looking at the economic indicators and see that things point to inflation rising, as a bank you know that if I keep interest rates low, I will be losing money when the people are able to pay me in dollars worth less than they should be. So I hike the rates. Likewise if I think deflation is coming, I start to drop my rates to get as many customers as I can before other banks can get them so that I make as much money as possible.

That is why you can look at three month t-bill rates and guess what the inflation should be going towards:

I have some much better charts in my books sorry that I cannot find one as clean as I would like.




Actually with the liquidity crisis, I think you feel more strongly than I about it (because everything that I have seen has very little evidence of it besides maybe japan, which is more of a no demand for lending) so why we don't just have you do the heavy lifting on this part.

And without us getting to a agreement on if mortgages can have a second loan attacked to the loaned amount (Remember I said we can't) that is a far larger issue to surmount than this. Because the numbers would be off by such a enormous amount it would be hard to figure out the liquidity trap.

 

[hanimmal]

Investing is gambling, period. There is only 1 thing that you can invest in that is guaranteed to hold its value ( Im not talking about ideas here, something physical).

It is yourself.

That is the only thing that has no risk.