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Strategies & Market Trends : New US Economy Policy
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To: Arthur Tang who wrote (142)4/13/1998 7:20:00 AM
From: Arthur Tang  Read Replies (1) of 435
 
Is the bank mega mergers spelling less dependency on the Federal reserve bank?

Yes, the saving in efficiency by scale alone, creates wealth. Wealth means less overnight discount loans from the federal reserve bank. This new economy eventually puts banks into self sufficiency. As the economy further improves, the banks will find no loan takers. commercial banks will have to also move into land development deals.

Local savings banks are now solvent and also do very little loans from FHLB and federal reserve banks. Eventually money will be chasing loans.

This spells trouble for Congress to think that there are business loans that can support Social security payments. The stock market certainly is not big enough to support $300 billion payments per year. When government surplus happens, treasury bonds and bill will disappear. If social security shifts into investing in local municipal bands, that will disappear later also, when municipalities become self sufficient.

The new economy will ultimately create enough wealth so that all of us will be self sufficient. No loans, no need for interest payments for a living? The society will have to be based on productivity, and we have to work until we die. No retirement.

Productivity is already here. Just look around. Lots of old people are still working. Retirement is only because we did not have enough jobs available.
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