Credit and money

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Joined: Mon 28. Feb 2011, 11:17
PostPosted: Mon 23. May 2011, 19:07
Credit and money

Where there is money, mostly,the institution of the loan is not far away. Today, the possibilities are more varied. The modern financial system enables the disintermediation of credit. That means the owner of the money does not even know the debtor. He brings his money to the bank that it gives. For this the owner of money and pay out. The Bank is both a debtor (ie the one against which the money is) and creditors (as opposed to those which it lends). Thus the banking system itself can create money. Loans come in many forms: demand deposits with the bank, mortgage loans, debt, credit cards, installment loans, derivatives, foreign exchange and bonds. The securitization could explode, the credit volume in the Western world since the 80s.
Since the Great Depression of 1929 to operate against all aware, the U.S. policy of credit expansion and money. The World Bank and International Monetary Fund IMF to support this thing on the whole. Due to this reckless monetary policy, the world was flooded with liquidity. The money supply in the world has in the past 30 years, more than vervierzigfacht, quadruples the amount of goods only. The Dow Jones increased twelve-fold since 1982, the domestic product in the U.S. increased by only a factor of four. The global financial system has now become a complex house of cards of credit that can never be repaid more. 2005 alone, the volume of financial derivatives almost five times the gross world product.
The circulating in the economy money supply is not measured by the monetary base by the central banks, but by the sizes of M1, M2 and M3.
M 1: The sum of the outstanding bank notes, checks and in some Agen (account balances at banks)
M 2: Savings deposits and time deposits
M 3: Other time deposits and deposits in money market funds
M 1 is a very close definition of cash, M3, a broad concept. There is more money in circulation, was originally created as the FED. M3 comprises alone 80% of U.S. GNP. The explanation for this. As the central banks, commercial banks can also create money. If a customer brings money to the bank, the bank lends it further. Now two have the money. The customer has an account balance, the borrower of the money. The Bank's life does that not all customers want to withdraw their money at once.
Approach can be seen as the inflation of the loan balance, if one shares the M3 money supply by the real gross national product. As a further definition of M3 is in fact an indicator of the loan balance. While M1 has remained almost constant since 1980, the value at M2 by 100% and M is increased by 145%. Stand 2007th The Fed did nothing to the increase of M3 to limited. On the contrary. Already in 1990 the Fed had softened the minimum reserve requirements beyond recognition. Initially, these were reduced to zero for all accounts-up to the current accounts. Commercial banks may continue to book end of the day, the various existing balances of current accounts largely to other accounts. The next day, they are then taken out and reversed. If you were at night, check the balance sheets of banks, the value of current accounts by hundreds of billions of dollars would be given to low. The account specified for the financial institutions result of this change in policy: You can easily meet their reserve requirements, but are not limited only in some way. This also means that the cash reserves of the U.S. banking system are critical low.
In November 2005, announced the U.S. American Fed, from March 2006, no longer wish to publish figures for M3. One can only suspect a cover-up tactics here. The Fed "controls" the money supply in the U.S. and thus the monetary policy of the world.
During the whole period of the technology boom, Greenspan kept in the policy of easy money, thereby ensuring that a lot of money flowed into the stock market. That was the real origin of the New Economy. Where to easy credit and money are often miserable or unreasonable business ideas are funded. Since investors do not know what to do with the money, they buy property and drive up prices further and further into the air. After the bursting of the housing bubble in 2007, Bernanke turned the purse wide open and allowed the huge rescue packages and the support of the ailing and insolvent banks.
Ben Bernanke, since 1 February 2006 Federal Reserve Chairman shall, in the same footsteps. to think of giving information about his views is the following statement from the club of economists in November 2002.In this he dealt with the problem of deflation. Quote: "They (the Fed) will do everything possible to ensure that any deflation will be short and mild.". So it is, the Fed wants inflation, and flooding the market with money. In the event of deflation, the government could print any more money and put it into circulation. We draw the conclusion that a determined government (and a more determined group, the central banks holding) produce a paper currency with higher spending and hence inflation can, whenever she wants it.

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