One of my points was that your claim of 54T of revenue ignored the cost of capital and the expenses that applied to that revenue. You misrepresented the amount of profit that could theoreticaly be captured by nationalization. It is much less than 54T. You answered my question about whehter you would follow the Constitutional law on takings; whehter you would pay for the private banks that you would 'sieze.' You said you would not nationalise them but instead you pass laws that would intentionally ruin them and cause their private equitey to drop to zero. You may have a legal issue there, but I suppose it could be massage with less candor. In terms of your utopian expectation of incentivising gov't workers; I would expect that the Gov't Bank would probably have a Gov't. Union and I don't think for a minute that your incentive expectationw will be met any better than they have been at the U.S. Post Office or any state's Motor Vehicle Agency. 'Moral hazard' would not be the issue...political corruption, crony capitalism would be the problem...just look at how the Jacksonians handled the State/National banking issues. If you go back to Colonial times, 18th century, pre-revolution the history of State Banking and political corruption is clear. It was the failure of colonial state banking that drove private banking to develop in America in the first place. In terms of the nature of the assets financed, I don't share your utopian confidence that a group of Government know betters will be able to choose what should be invested in. It was never worked in the past, so I don't see why it would now. It is one thing to create a limited State owned bank in North Dakota, with very few retail or commercial bank services, that operates primarily as a secondary market for private banks in a small state with a relatively simple econonmy and a population of only 700,000 residents, but it is quite another to operated a nationalized banking system that effectively meet the capital needs of the World's largest, most global economy.
âThe End Gameâ â Global Macro Investor, May 2012 Posted on June 1, 2012 Analysis by Raoul Pal â Global Macro Investor: âThe world has no engine of growth with most of the G20 countries approaching stall speed at the same time. The Western World is about to enter its second recession in an ongoing depressionâ¦â âFact: This will be the lowest cyclical peak in GDP growth in G7 history. These are the weakest ever foundations on which to enter a recession.â âThe ten largest debtor nations on earth have total debts of over 300% of World GDP.â Pal warnings: With very limited room for government bailouts, we can very easily join the next dots from the first bank closure to the collapse of the whole European banking system, and then to the bankruptcy of the governments themselves. There are almost no brakes in the system to stop this, and almost no one realises the seriousness of the situation. The problem is not Government debt per se. The real problem is that the $70 trillion in G10 debt is the collateral for $700 trillion in derivatives⦠Yes, that equates to 1200% of Global GDP and it rests on very, very weak foundations From an EU crisis, we only have to join one dot for a UK crisis of equal magnitude. And then do you think Japan and China would not be next? And then do you think the US would survive unscathed? That is the end of the fractional reserve banking system and of fiat money. It is the big RESET. Moreâ¦: Bonds will be stuck at 1% in the US, Germany, UK and Japan (for this phase). The whole bond market will be dead. Short selling on bonds â banned Short selling stocks â banned CDS â banned Short futures â banned Put options â banned All that is left is the Dollar and Gold Summaryâ¦: We have around 6 months left of trading in Western markets to protect ourselves or make enough money to offset future losses. Spend your time looking at the risks of custody, safekeeping, counterparty etc. Assume that no one and nothing is safe. Raoul Pal, 22 years experience in global finance â founder of Global Macro Investors. Also previous affiliation with GLG Global Macro Fund â London and with Goldman Sachsâ hedge fund business â equities and equities derivatives. Report accessed from Zero Hedge: http://www.zerohedge.com/news/big-reset-2012-and-2013-will-usher-end-scariest-presentation-ever 6 months from now it all won't matter. celebrate xmas early. strap in and wear a helmet. s
I see the fractional reserve/fiat bs is getting floated around now (as if any commercial civilization ever had a so-called 100% reserve requirement), along with illiterate ravings citing the notional value of derivatives with no idea that this is a pretty meaningless number. Oh well, it was a mostly good thread for an unusually long number of pages. Now we get to go back to the usual lunacy. For the record, I fully expect civilization to be still around come January, Mayans and their derivatives notwithstanding.