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.
Politics : Politics for Pros- moderated
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: KLP who wrote (372443)7/11/2010 8:29:22 PM
From: skinowski2 Recommendations  Read Replies (3) of 793917
 
Imagine a bank. The U.S. Treasury sells bonds to the bank, which buys them with depositors' money. It is a nice deal for the bank. There is no work to it, and no risk. The bank does not have to make a commercial loan. The result is a banking system stuffed with government bonds and business complaining about a lack of credit.

From what I understand, it's actually worse. Banks don't even have to depend on depositors anymore. They borrow money from the Fed at near zero rate, and use the money to buy treasuries -- and collect the difference in interest. Very weird system. It is as if the entire banking industry is becoming a money laundering machine for the Fed and the government.
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