Well, new quantitative easing (money printing/debt monetization) is here. They were just waiting for the election to pass. The Federal Open Market Committee of the Fed said it would buy up to $600 billion in long-term Treasurys until the end of June 2011, including about $75 billion this month. This is the next generation of quantitative easing: it builds upon the $1.7 trillion in mostly housing-related assets the Fed bought up between December 2008 and March 2010. It will be interesting to see what the Fed comes up with once this new hope inevitably fades.
Under the Basel III agreement, banks will have six years starting Jan. 1, 2013, to progressively increase their capital reserves. Under current rules banks have to hold back at least 4 percent of their balance sheet to cover their risks. Starting in 2013, this reserve – known as tier 1 capital – will have to rise to 4.5 percent, reaching 6 percent in 2019. In addition, banks will be required to keep an emergency reserve known as a “conservation buffer” of 2.5 percent. In total, the amount of rock-solid reserves each bank is expected to have by the end of the decade will be 8.5 percent of its balance sheet.
We’ll see by 2013 and 2019 if there isn’t some reason to further postpone these already postponed tighter regulations.
This is quite amusing if you haven’t already seen it. It is an old interview with Congressman Pete Stark Representative of California’s 13th district. The interviewer calls Stark on his B.S. economics regarding the National Debt and he refuses to explain them — since he can’t. The more wealth the nation creates the more debt it creates — both public and private. So there is truth to what Stark says, but it isn’t a positive thing as he tries to claim. It is just symptomatic of the insanity behind the modern debt monetary system.
“The truth is that a dollar of capital in a bank can actually result in eight or ten dollars of loans to families and businesses, a multiplier effect that can ultimately lead to a faster pace of economic growth.” President Obama 4/14/09
And that is a good thing why? Who wants economic growth that is dependent on ever-greater indebtedness to banks? I know I sure don’t. The only people who want that are people who either don’t get it, or who are working in the interest of the banks.
“The truth is that a dollar of capital in a bank can actually result in eight or ten dollars of loans to families and businesses, a multiplier effect that can ultimately lead to a faster pace of economic growth.” 