MOGAMBO: 'Hahaha! You Were Killed By Your Own Banks, You Stupid Morons!'

[Tace]

Richard Daughty -- World News Trust
email: [email protected]

I was, as I do every year, trying to get really stinking drunk after Christmas, trying to forget the bitter disappointment of Santa, who, as usual, brought me NOTHING that was on my list, including the stuff at the freaking TOP of the list, like a young and beautiful trophy wife who begs me not to hate her because she is rich, no frozen pizzas loaded with pork products, no flame throwers or armaments of any kind. I was still, unfortunately, still sober enough to be shocked when I saw that Total Fed Credit expanded by a whopping $9.2 billion last week, and my face drained of blood when I saw that Currency in Circulation jumped by an incredible $8.2 billion last week, too. Gulp.

Through bleary eyes I noted that the Required Reserves at the banks fell to an astonishingly low $41.8 billion. Being at the end of the year, perhaps it is customary to look back and see what bank reserves were a year ago. Hmmmm. It looks like it averaged about the same $41.8 billion! Now let's take a look at the assets and liabilities of the banks, against which these reserves are supposed to provide a cushion against loans going bad and depositors wanting their money back and The Mogambo cashing bad checks all over town. Hmmmm. I see that in Loans and Leases alone, the banks are up almost $2 trillion! About 50% more! In one year!

And savings deposits (which is the few paltry dollars that that we somehow managed to keep away from the luxuriating "family," all the time with their incessant whining "We're cold and hungry! We're cold and hungry! Waaa waaa waaa!" like I am supposed to, I guess, go out and spend precious money on food and heat, like I am some kind of Mister Moneybags or something), is up a cool trillion dollars in the last year, too. And yet, rubbing my forehead in a vain attempt to comprehend the situation, against all of this trillions of dollars of vastly increased risk exposure and liability, Required Reserves have not increased so much as a lousy dime? Nada? Zipola? It just goes to prove that The Mogambo was right when he said that financial crises are always caused by banks, the greedy, grubby and gangrenous banks, getting themselves in trouble by acting irresponsibly and allowing others to act irresponsibly, too, and ruining everyone and everything else in the process.

Speaking of banks ruining everything, thanks to ContraryInvestor.com we now have the Office of the Comptroller of the Currency noting that, "But it's at the top of the credit cycle where stresses and weaknesses typically appear, so what we are seeing today should not surprise anyone." I jump to my feet and shout, "Not to anyone who has ever read history!"

more

http://worldnewstrust.org/modules/AMS/article.php?storyid=2031

[sakabatou]

1. Scary...

[teryang]

2. Mogambo hyperbole?

It seems that businesses and corporations tend to keep most of their wealth tied up in the resources they use in the course of business. Yet consumers are supposed to save paper dollars. Banks only have to meet reserve requirements in the fractional banking system. A friend of mine with a math degree and a self made business entepreneur always chided for saving money and not using equity in real estate to borrow more money. He said it was a losing proposition. In fact the most successful people I know were heavy borrowers.

Under such circumstances where interest rates are unnaturally low promoting credit to purchase just about everything, what is the incentive to save cash? Most americans almost naturally have felt inclined to go ahead and spend their discretionary money if they have any. They are basically accumulating things in lieu of money, which has no return for all practical purposes.

Why not buy silver or gold? If interest rates rise, people won't be able to get out of gold fast enough.

I can't imagine that interest rates would go up in a big way like they did with Paul Volker as the fed chairman, unless Democrats take control of the legislature or a democrat comes into the white house. Then it will be okay to bring the whole economy down. The third alternative would be a major war or dictatorship or something of that nature where they attempt to enforce the value of the dollar by edict and force, as many dictatorships have tried.