4 ms·

The entire system is a house of cards. The collateral of the system itself is debt (USTs). There is no firm ground to stand on after decades of low interest rat

The entire system is a house of cards. The collateral of the system itself is debt (USTs). There is no firm ground to stand on after decades of low interest rates. Marginal tweaks to banking regulations neither caused nor can fix this. The Fed is raising rates and we are taking our medicine.

fwungy 4y ago
The Fed, creates magic money from thin air then lends it to the government at interest to sell as T bills. Guess who is on the hook for the interest? The US taxpayer. The Fed is owned by its member banks which are for-profit corporations. Imagine paying interest to a third party to access your own wealth! That's the USA. There is no technical need for the Fed. We were fine without it till 1913. It just makes a lot of insiders rich.
- coliveira 4y ago
  There is no technical need for any bank, at least in the way they operate now. When you get a house loan, you're not getting any money, you're transferring the property lien to the bank in exchange for cash. It is just a value exchange not a real loan, and this could be done by the government. This is true for pretty much anything a bank does nowadays, they're just exchanging one type of value for cash and getting interest on the top of this transaction that takes a few minutes to process.
dmix 4y ago
> The Fed is raising rates and we are taking our medicine. Taking our medicine would imply there are market consequences. It seems the typical gov reaction is some form of bailouts to the high end of the market combined with regulation to further limit the market to a few giant monopolies. All the matters to people is not ruffling feathers, a sense of security, not about actually solving the root problems that SVB took a massive gamble on mortgages and no one seemed to care. Gov focusing on helping the depositors is fine. But it sounds like the vast, vast majority of SVBs depositors will be made whole. So that's probably not even necessary. The Yallen stuff is most likely about calming the market, not direct intervention.

fwungy 4y ago

The Fed, creates magic money from thin air then lends it to the government at interest to sell as T bills. Guess who is on the hook for the interest? The US taxpayer. The Fed is owned by its member banks which are for-profit corporations. Imagine paying interest to a third party to access your own wealth! That's the USA. There is no technical need for the Fed. We were fine without it till 1913. It just makes a lot of insiders rich.

coliveira 4y ago
There is no technical need for any bank, at least in the way they operate now. When you get a house loan, you're not getting any money, you're transferring the property lien to the bank in exchange for cash. It is just a value exchange not a real loan, and this could be done by the government. This is true for pretty much anything a bank does nowadays, they're just exchanging one type of value for cash and getting interest on the top of this transaction that takes a few minutes to process.

dmix 4y ago

> The Fed is raising rates and we are taking our medicine. Taking our medicine would imply there are market consequences. It seems the typical gov reaction is some form of bailouts to the high end of the market combined with regulation to further limit the market to a few giant monopolies. All the matters to people is not ruffling feathers, a sense of security, not about actually solving the root problems that SVB took a massive gamble on mortgages and no one seemed to care. Gov focusing on helping the depositors is fine. But it sounds like the vast, vast majority of SVBs depositors will be made whole. So that's probably not even necessary. The Yallen stuff is most likely about calming the market, not direct intervention.