>> >> >> I couldn't figure out whether you approve or disapprove of all this >> spending. > ----------------------------------- > My Q was what would you like instead? > > I am 50/50 on the spending because there is not enough spending that > will equate to wages for the masses. > > -- > Stephen Russell > Sr. Production Systems Programmer > First Horizon Bank > Memphis TN > > 901.246-0159
Read my previous message to Geoff. Also spending more than the Iraq war by printing money or borrowing and on things that are not investments is a waste and will cause huge problems when the multiplier effect kicks in. Historically the multiplier is 5. That is, a bank is allowed to keep 20% of their deposits and lend the rest. In a macro sense every dollar saved is lent out five times. That is, a bank takes in 100 dollars and lends 80. That money goes into peoples hands and is deposited into another bank which keeps 20% and lends out 64 and so on until the multiplier effect ends. Currently the multiplier is about 1.5 because banks are not lending. The only reason that there is no run on the bank is that people accept the 20% rule. If they suddenly realize that they may not be able to withdraw all of their money, they make a run on the bank hoping to get out before the next guy. This is what happened to financial institutions. They were leveraged 30:1 not 5:1 and one firm asking for all their investment back wasn't able to which started a chain reaction as others realized they weren't going to get paid either. Now we have to back out that 30:1 leverage. _______________________________________________ Post Messages to: [email protected] Subscription Maintenance: http://leafe.com/mailman/listinfo/profox OT-free version of this list: http://leafe.com/mailman/listinfo/profoxtech Searchable Archive: http://leafe.com/archives/search/profox This message: http://leafe.com/archives/byMID/profox/077001c98578$e7409970$6401a...@dual ** All postings, unless explicitly stated otherwise, are the opinions of the author, and do not constitute legal or medical advice. This statement is added to the messages for those lawyers who are too stupid to see the obvious.
