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by matheusmoreira
42 days ago
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So it's no longer "reserves", it's "capital requirements", "liquidity coverage ratios" or whatever else. Banks inverted the technical language. They don't literally loan out deposits anymore, now they just create loans out of nowhere. Except they still can't create loans out of thin air unless they have actual equity to back at least a fraction of those loans. They still can't create money unless they have... reserves...? And what do you know... Deposits just happen to be the the easiest way to fund that equity account..? Yep. Not a single change to the moral calculus here. Banks want to be as leveraged as possible. They want to risk it all: their own assets, and other people's money. And they want that risk to be subsidized by society itself. And society allows it because it's addicted to cheap credit. Loans are so thoroughly wired into people's finances at this point that weaning them off it is actually dangerous, not just politically inconvenient. So we'll keep building up and unwinding financial call stacks, and the godlike oligarchs observing and programming the system will keep profiting from the peaks and valleys while everybody else just keeps getting rekt. Nothing new here. |
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The limits to banking are when the last creditworthy person prepared to pay the current price of money walks through the door.
[0]: https://new-wayland.com/blog/post-war-banking-policy/