[woods]
> the Fed. has been handing out billions of dollars of loans to banks
Craig:
Banks shouldn't be borrowing, they should be lending. That's part of the
problem.
Craig
woods:
Exactly. When banks get our money when we deposit it, somewhat similar
to "It's a Wonderful Life" the old Jimmy Stewart movie, but more complex
additions,
such as banks make investments now, which
all originates with depositors money. In the movie, it was a greatly portrayed
how when everyone ran on the bank Stewart (can't remember his characters name)
had to explain to them that (to use made up names) Sally's money was in Bill's
house
and John's money was in Tom's new tractor, etc... The bank loans out money to
people via money that other people deposit. Banks make money on interest
paid through the loan. Banks make investments now-a-days, as said, but I'm not
educated
in where these investments occur. I do know with the removal of the
Glass-Steagall Act
in 1999 Investment Firms like Goldman Sachs were able to be both commercial
banks
and still remain investment firms. This was an Act from the Great Depression
era
to stop the high risk gambling of Investment Firms from having direct impact
on the banking system, but for some odd reasons was repealed in 1999 and look
what's
happening.
But you do go right to the point Craig, "Banks shouldn't be borrowing, they
should be lending."
I agree. And consumers shouldn't be borrowing, too. We all should be saving
and then buying. I
don't see any of this curbing. Inflation and debt...
woods
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