People such as yourself are the ones least worried and stressed. It's the people who've never experienced a significant downturn, watching their 401(k) become a 201(k) or 151(k), their home values dropping by 25% to 50%, and credit becoming scarce (the more they depend on credit the worse) that are panicking. However, seasoned and grizzled veterans of past downturns seem very concerned because there doesn't seem to be any reasonably clear indication as to when relief will come, nor how much worse things will get. The people I personally respect the most are adopting the most conservative strategies. They've gone into wealth preservation mode, unwilling to risk anything of significance as they and/or people they know have bloodied hands from past attempts at trying to catch falling knives.
If they had not done that, their estimation is that by 2pm that afternoon, $5.5 trillion would have been drawn out of the money market system of the U.S., would have collapsed the entire economy of the U.S., and within 24 hours the world economy would have collapsed. It would have been the end of our economic system and our political system as we know it. Democratic Representative Kanjorski explains how the Federal Reserve told Congress members about a "tremendous draw-down of money market accounts in the United States, to the tune of $550 billion dollars." According to Kanjorski, this electronic transfer occurred over the period of an hour or two. And it gets worse. On Thursday (Sept 18), at 11am the Federal Reserve noticed a tremendous draw-down of money market accounts in the U.S., to the tune of $550 billion was being drawn out in the matter of an hour or two. The Treasury opened up its window to help and pumped a $105 billion in the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks. They decided to close the operation, close down the money accounts and announce a guarantee of $250,000 per account so there wouldn't be further panic out there http://zerohedge.blogspot.com/2009/02/how-world-almost-came-to-end-at-2pm-on.html
Claiming we survived that day, is like living in Nagasaki on August 6 1945, and saying phew..it was only Hiroshima. We should surrender the system to the free markets and move on..The damage is done.
If the "massive electronic run on the banks" has happened once it will happen again anytime. The world economy is hanging by a thread.
Money is property. I have every right to loan/rent/give away my property under whatever terms i want. How the hell is interest contract fraud? Denninger is pretty good albeit on the bear side.
Heh, yeah in one scenario the dollar devalues but the market is up so you make back the losses from DOW14K and feel rich although you can't buy anything with your $; in another the market devalues, the dollar is steady or strong, and you have no money ;-)
Yes, I understand, but you should qualify your statement. Banks, charging interest on loans above actual reserves can be equated with fraud, because of fractional banking, they are charging interest on property that doesn't exist.
interesting premise... I still think the interest they charge is the premium they demand for taking on the risk of you not paying it back (plus profit). If you don't pay it back it's not like they can just print up some more and use that to offset the loan asset on their B/S (Im not talking about he fed here).