All,

T

hese numbers are an expression of how much debt inflation that the government is trying to create, and has little to do with bankers, who must equally compete for business based upon the false economy created by government intervention.

Private companies would never tolerate this level of risk. It is government intervention using Keynesian monetary inflation that allows them to, on top of government insurance.

The mistake that was made this time, if you assume that debt inflation, fiat money, and monetary inflation were necessary to use as an incentive to attempt to stimulate the populace into invention (entrepreneurship) was

a) that entrepreneurship is different from consumption, which is teh only entrepreneurship that’s going on.

b) that if bankers are going to lend fiat money->inflated money->debt inflated money then the people who are making the loans must, SIMPLY FOR EPISTEMELOGICAL REASONS maintain a minimum ownership of the collateralized assets. This ownership in turn, would reduce the amount of debt inflation that the lenders would tolerate.

c) we should also make lending officers adhere to the same standards as we have CFO’s and CEO’s, in that they cannot escape personal liability for their lending practices. This will decentralize banks, and reestablish community banking. As such, the consumer, the economy, the banking system, is all served.

We do not yet know how to create debt instruments that will allow customized assets (houses and property versus cars or oil) to be quantitatively measured, so that they can be resold. This is not a regulation problem. it is a knowledge problem. It may be that such things are not possible. I won’t say that because if we solve the problem of induction, then it may become possible, but as yet, it appears that these functions (fiat money/debt inflation/banking/instruments/custom assets) cannot perform as we would expect them to, because housing and land, and time, are not commodities that can be quantitatively represented as a ‘category’ in the calculative sense.

Cheers

Curt Doolittle

PS: Short version “require human knowledge of assets where any form of inflationary money exists”.

——————————————————————————–

To: austrianschoolofeconomics
From: martycarbone
Date: Sun, 26 Oct 2008 16:05:40 +0000
Subject: [Austrian School of Economics] Who runs the banking system in the U.S.A.?

The following reserve requirement ratios are prescribed for all banks.
The numbers come from § 204.9 (e) of

<< http://www.fdic.gov/regulations/laws/rules/7500-500.html#7500204.2
>>, a federal law.

See: http://www.howto-ville.com/Money%20Section/moneysupply.html

§ 204.9 Reserve requirement ratios (in text form)

The following reserve requirement ratios are prescribed for all
depository institutions, banking Edge and agreement corporations, and
United States branches and agencies of foreign banks:

For a net “Transaction Amount” (TA), the “Reserve Requirement” (RR) is
in accordance with the following text.

For a TA of $0 to $9.3 million, the RR is 0% of TA
For a TA of $9.3 to $43.9 million, the RR is 3% of TA
For a TA over $43.9 million, the RR is $1,038,000 + 10% of amount over
$43.9 million

It is interesting to note that there is no mention of “capital/asset
ratio”. Which, I am told by a knowledgeable authority, is what
banker’s pay attention to.

That is probably because the “capital/asset ratio” is a rule of an
international banker’s group — not a law of this country.

This seems to raise the question, “Who is running our banking system”?

What do you think?

martycarbone at yahoo dot com ( correct the address)

 

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