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Strategies & Market Trends : Waiting for the big Kahuna

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To: robert b furman who wrote (65189)8/4/2003 11:11:15 AM
From: Real Man  Read Replies (1) of 94695
 
The way I understand banking system works - they make loans 10 times the actual amount of cash, to leverage on interest rates. So, if someone can't pay a loan, bad things happen, as 10 times the amount is lost. I'm sure you read it somewhere many times, as I did. The Fed may print to put the amount back into the system, but with the current size of the bond market, they will have to print a lot more than the size of the US economy. In that case, US dollar will go into the toilet, gold up. Either that, or a case of bad deflation, or both (Argentina)
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