The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: The Vet who wrote (87928)	9/2/2007 6:59:19 PM
From: John McCarthy	Read Replies (1) of 306849

Hi Vet You make a strong case and one that I cannot see thru. Whats bothering my brain is the 500k loan. On *somebody's books there has got to be a debit/credit along these lines .... Debit Asset Account - Mortgage - 500,000 Credit Liability Account - $ Created to give Mortgage Holder In a brief google I get the sense that if we got back to our original 50k of depositor money the game runs like this Bank keeps 10% or 5k Federal Reserve gets 90% or 45k Once thats done - the bank is free to lend 10 * 50k .... And YES I could be misunderstanding the above also. Somehow I think but cannot get there .... that once the mortage holder goes bankrupt and pays back nothing (just to simplify) - the bank is in HOCK to the Fed for 500k - 45k and can no longer make loans. But - clearly - I am lost within this subject matter. So I had better SHUT-UP and listen more than talk. regards, John lewrockwell.com en.wikipedia.org

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