“Round and Round It Goes and When It Stops, You Get Hosed” 0
At Asia Times, Ellen Brown wonders why the Fed keeps shoveling money to banksters in the name of “increasing liquidity,” when banks are supposed to lend, not borrow.
She explains that it’s more Wall Street three-card monte. A snippet:
The answer is no. Today when banks make loans, they extend credit first, then fund the loans by borrowing from the cheapest available source. [4] If deposits are not available, they borrow from another bank, the money market, or the Federal Reserve.
Rather than loans being created from deposits, loans actually create deposits. They create deposits when checks are drawn on the borrower’s account and deposited in another bank. The originating bank can then borrow these funds (or others created by the same process at another bank) at the Fed funds rate – currently a very low 0.25%. In effect, a bank can create money in the form of “bank credit”, lend it to a customer at high interest, and borrow it back at very low interest, pocketing the difference as its profit.
If all this looks like sleight of hand, it is. The process has been compared to “check kiting,” . . . .
Read the whole thing.
Then invest your money in a slot machine in Lost Wages, Nevada; at least those games are regulated.
