clarky003
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http://onlinejournal.com/artman/publish/article_2303.shtml
Do a Bank Roll?
Even if you think this is boring as hell, read it, it's extremely important. It is a great article for understanding what's happening to the stock markets if you don't know what the hell is going on.
I constantly bang my head against the nearest object watching the superficial business reviews on BBC news 24, struggling to explain the exact causes of the plumeting markets and even having the nerve to actually say "we don't quite understand why such and such is happening" followed by the reasoning "it's very complicated".
They only ever seem to scratch the surface on the cause of the stifeling investments that are taking place, or more correctly, not taking place.
To sum it all up though.. The massive amounts of fractional reserve loans that were introduced into the system by the FED when interest rates were at 1% ceated massive amounts of credit in the system. Now, all that money has to be backed by assets to be worth anything, but initially the FED has always loaned out more than they own in assets and used the interest off the loans to buy new assets to counteract the problem. The dollar has decreased in value because of this very reason, it is only worth a fraction of itself now because it isn't backed 100% by the origional value in assets (gold).
In simplist terms what's happening is companies and investors are now seriously wondering weither their paper bonds and loans are worth their weight in assets, and because of that doubt interest rates are rising to contract the loans going into the system to shrink the amount of credit in circulation which is supposed to correct the problem, subsequently people get scared and stop investing as much.. hence the market devalues and more worries ensue.
But in turn people are realising it seems the US is essentially bankrupt and the FED do not have the assets to back up the credit in the system. I think ultimately this is the silent crisis that is causing all these wars, because if this is true and all the signs are there, then invading other countries for more asset aquisition would be their goal to correct the problem.
Rather than just come out and admit their mistakes which would ultimately loose them their jobs, they have used political games to perpetuate their fractional reserve system, even though it is clearly the root cause of the credit problems.
Do a Bank Roll?
Even if you think this is boring as hell, read it, it's extremely important. It is a great article for understanding what's happening to the stock markets if you don't know what the hell is going on.
I constantly bang my head against the nearest object watching the superficial business reviews on BBC news 24, struggling to explain the exact causes of the plumeting markets and even having the nerve to actually say "we don't quite understand why such and such is happening" followed by the reasoning "it's very complicated".
They only ever seem to scratch the surface on the cause of the stifeling investments that are taking place, or more correctly, not taking place.
To sum it all up though.. The massive amounts of fractional reserve loans that were introduced into the system by the FED when interest rates were at 1% ceated massive amounts of credit in the system. Now, all that money has to be backed by assets to be worth anything, but initially the FED has always loaned out more than they own in assets and used the interest off the loans to buy new assets to counteract the problem. The dollar has decreased in value because of this very reason, it is only worth a fraction of itself now because it isn't backed 100% by the origional value in assets (gold).
In simplist terms what's happening is companies and investors are now seriously wondering weither their paper bonds and loans are worth their weight in assets, and because of that doubt interest rates are rising to contract the loans going into the system to shrink the amount of credit in circulation which is supposed to correct the problem, subsequently people get scared and stop investing as much.. hence the market devalues and more worries ensue.
But in turn people are realising it seems the US is essentially bankrupt and the FED do not have the assets to back up the credit in the system. I think ultimately this is the silent crisis that is causing all these wars, because if this is true and all the signs are there, then invading other countries for more asset aquisition would be their goal to correct the problem.
Rather than just come out and admit their mistakes which would ultimately loose them their jobs, they have used political games to perpetuate their fractional reserve system, even though it is clearly the root cause of the credit problems.
