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Reply #14: The Fraud of Fractional Banking (Mogambo warning) [View All]

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54anickel Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Feb-03-05 08:37 AM
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14. The Fraud of Fractional Banking (Mogambo warning)
http://www.kitco.com/ind/Daughty/feb022005.html

The heavy lifting this week was done by the banks, which soaked up $26 billion in government debt (!), and a little help from foreign central banks, which absorbed $3.8 billion of US debt themselves. The Treasury, always ready to spend us into the poorhouse, sold oodles of fresh US debt last week, bringing us up to, as of today, $7.627 trillion in debt.

Rubbing my eyes in disbelief, corporate bonds again went up in price and down in yield, to another new record! This was at the exact same time as fresh evidence of rising inflationary pressures is spooking me out, as the Gross Domestic Price Deflator bumped up to 2%, and the Employment Cost Index also went up.

Total Fed Credit, that mystical place which is the Fount From Which Magical Money Appears As If By Magic Which Is Then Compounded By The Banks Via The Fraud of Fractional Banking (FFWMMAAIBMWITCBTBVTFOFB ) is actually not expanding at it's usual, out-of-control clip. Whether or not this is the start of something big or is just a random wiggle in the chart, I don't know. But if it IS a change, then look out below! As usual, and you technically-oriented people have already noticed, it again coincides exactly with the performance of the stock market this month.

I recently read somewhere, by some moron, that the reserves at the banks still constitute about 10% of liabilities. Hahahaha! In 1997, liabilities in the banks were about $2.5 trillion, and reserves were $45 billion. Today, liabilities are $4.7 trillion, and reserves are $43 billion! Hahahaha! Liabilities almost doubled, and reserves actually went down! Hahahaha! Central banking at its finest!

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