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For a different understanding of the banking "crisis"...

Original post made by Gary on Apr 15, 2009

We seem to have to listen to a certain paragigm of the banking crisis, yet it does not make a lot of sense, except that it is being driven by those very prognosticators of panic.

Here is an alternative, and credible point of view, from NPR (this morning), by Richard Bove:

Web Link

Why are we being driven over the panic cliff by the mark-to-market crowd?

Comments (1)

Posted by qq, a resident of Barron Park
on Apr 16, 2009 at 7:26 pm

I'm glad the Federal Reserve hasn't panicked.

Web Link

Remember, this lending is high powered money.

Web Link

Once it gets into the system, it is lent out on a fractional reserve basis using a money multiplier. Trillions of dollars are on loan right now. Will it ever get paid back?

Fiji just had to devalue their currency by 20% to try and bring tourism back.

Web Link

How would holders of U.S. dollars (Ni hao!) take a similar devaluation? We've done it before, perhaps we will do it again.

qq


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