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Strategies & Market Trends : The coming US dollar crisis

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To: Real Man who wrote (12710)10/8/2008 10:43:55 PM
From: axial  Read Replies (1) of 71450
 
How does the shadow banking system factor into the current crisis? I don't see it discussed much.

How much is moving through conduits, and not being accounted for? I know we get figures for notional value of global derivatives, but nobody claims those figures are all-inclusive.

I haven't seen any economic theories/models incorporating "shadow" banking systems. The convention is: there's a banking system, not two parallel systems, one of which is unregulated, and "unofficial".

If $10 or $20 trillion is moving in and among shadow banks, would we know? Is it being factored in?

Currently there are many unknowns; shadow banking is just one more. Nobody likes conspiracy theories and unprovable "magic" explanations; still, I can't shake the idea that shadow banking may be more important than realized.
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