SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Valuepro who wrote (61929)10/25/2008 8:50:03 PM
From: loantech  Read Replies (3) of 78410
 
What worries me about the fractional system and I do not have the expertise to understand more than the basics as the banks get their $$$ from the fed say $100 and lend out $90 as the ratio was worse than a 20% reserve then the borrower takes that $90 and deposits it and the new depositors bank lends out $81 and then that gets redeposited and the next bank in line lends out an estimated $72 etc etc.

The problem I see is that when certain loans go belly up and assets are written off the expanding effect can work in reverse so it does not take 90% of all mortgages to go into default to cause a reverse cascading effect and I think that is where we are now. And the current panic is running around like a chicken with it's head cutoff trying to patch a lot of leaky holes in the system that is moving ever faster towards a problem. I am just not sharp enough to see or explain how it is happening but I do believe it is opposite of the ever expanding lending scam where an initial loan from the fed for $100 can go out to make hundreds by the time all the lending is expanded from the initial $100.

So we may be in deep sh#t. I am hoping you can reflect on this idea. Or maybe pour cold water on it if it has no basis.

Tom
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News