DiscussWorldIssues - Socio-Economic Religion and Political Uncensored Debate - View Single Post - Message From Ron Paul: Audit The Fed Headed To The House Floor!

**15Praxanant** · 07-14-2012, 08:30 PM

I don't think it's all their fault, though.. If you watch ten bucks flow outward from a central bank to the big banks.. Then outward to another ring of commercial banks, it's expanding by say 10X, maybe.. (Minus reserve requirements) at every step.

You get a bubble and wildly increased lending.. and it just gets bigger.. and bigger.. and bigger.. Till it can grow no larger thanks to ancillary forces unrelated to money creation.

THEN, it pops and the situation reverses and folds inward upon itself.

This is bad enough in and of itself. It becomes worse when that initial spurt of lending was compelled by congress, and was intentionally designed to deliver bad loans to people who couldn't pay them back.

07-14-2012, 08:30 PM	#39
15Praxanant Join Date Oct 2005 Posts 426 Senior Member	I don't think it's all their fault, though.. If you watch ten bucks flow outward from a central bank to the big banks.. Then outward to another ring of commercial banks, it's expanding by say 10X, maybe.. (Minus reserve requirements) at every step. You get a bubble and wildly increased lending.. and it just gets bigger.. and bigger.. and bigger.. Till it can grow no larger thanks to ancillary forces unrelated to money creation. THEN, it pops and the situation reverses and folds inward upon itself. This is bad enough in and of itself. It becomes worse when that initial spurt of lending was compelled by congress, and was intentionally designed to deliver bad loans to people who couldn't pay them back.
	Quote