(financiële) toestand in de wereld

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The Fed knows something criticial here: fractional reserve banking is vulnerable. If a bank lends out 20-30X as much as it holds in demand deposits, it only takes 3-5% of depositors to panic withdraw to cause a bank crisis.

It's all about psychology, not about financial invincibility.

It was the Fed printing money (inflation) that caused the problem in the first place; that led to the Fed raising rates sharply to counter inflation (that it caused)...and now the solution is to print more money to bail about the banking system. Which is, of course, inflationary.

A vicious cycle.


Mike
 

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