[FC, maybe you can answer this question for me. The Fed is pumping money into the system like crazy. Where is the money going? The banks don’t seem to be lending it. Are they sitting on it? Or, are they buying T-bills? Is the Fed shoveling it out one door and shoveling it in the back door? ]
I think it’s sitting in the banks, but they are all scared to lend, so they are sitting on the capital. We are in a huge credit contraction, thus deflation right now. But we still have a couple trillion about to be pump out there, so at some point the game of musical chairs begins.
Wrong, it's in the banks in china,there is just some people you cannot refuse to pay.
The reason for that bailout was because there was no “commercial paper,” that is, money that could be lent to business so that business could conduct business. The threat was, they claimed, if we didn't give the banks the money, business would shut down. Well, they crammed the agreement through in two weeks, the banks got the money, the banks are sitting on the money, so what happened to the “commercial paper” crisis?
I'm starting to think G. Edward Griffin was more and more correct in what he posited in “The Creature from Jekyll Island.” It sounds like the bailouts over the past months were to protect the banking cartel fro losses incurred from the bursting of the dot com and housing bubbles and of bad home loans that the government (that is, Jimmy Carter and Slick Willy Clinton) forced them to make to people they knew couldn't pay them back. I wouldn't be surprised if this was all arranged under Jimmy Carter's watch, knowing this would happened but figuring it was just another method of redistributing money from the have’s to the have-not’s (by essentially buying houses for them), with the banks serving as middle men and recouping their losses in bad debt through bailout.
So call me paranoid or conspiratorial. All that's been happening for the past 10 years is not coincidental or accidental