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Napanee, Ontario | It's like a window into the industry and i greatly appreciate how you see it.
"But, theoretically, if the banks start increasing their loan to deposit ratios, more money should be created which, in turn, would allow the FED to reverse their quantitative easing money that they created out of thin air. That is the great hope.
That is what I have been musing about... and IMO is the only situation that i could see the Fed having an out. But like you say... in theory. The other factors you describe, and what i frankly agree with, are what make it a hell of a long shot. Forcing out credit to unworthy clients is a recipe for disaster and we learned all too well where that road leads from the mid 2000's housing debacle.
"So, a more likely scenario from my standpoint will be just more creative math the continue the dysfunction for as long as possible. One of those such tools might be just to offset the bloated FED balance sheet against the US Treasury Notes they purchased. IMO such future economic steps or similar creative past accounting steps are like a dog chasing its own tail and will ultimately fail as well, b/c a society with a systemic broken value system is incapable of producing real wealth or digging itself out of hole that we find ourselves in."
unfortunately, i tend to agree. Thanks again for the insights Iowegian ;) | |
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Loans make deposits II
