Pondering thoughts – why is the Fed is raising interest rates?
Was thinking about this and wondered why no one else is stating this? Simply, raising rates help fight economic inflation caused by too much money in the systems. What we have is supply side shortages causing inflation, what the Fed has just done is to give it’s patent the wrong drug. These people have to know this… Its not my job and I know this…. This is why I keep saying this is all intentional and they are trying to crash the economy.
We could put an end to the blockage in the strait of Hormuz, my god, our military could dominate the cost and inland of the cost by 100 miles and open the strait? We don’t need Iran to agree, we just do it… Since Saudi Arabia sells oil in US dollars, they are involved too, we used to have an agreement to protect Saudi Arabia for selling oil in US dollars, which just expired. I don’t know if this is the only reason why but they asked for help from the US to protect their East/West pipeline and we said no.
All of this seem to make matters worst for the dollar, I think the government knows the dollar is toast. Enter stable coin, this is digital money that can be controlled… Remember the $5000.00 Trump promised if the Republicans win the midterm, the caveat, it must be spent in the US. How the hell is he going to do that without giving everyone $5 in the new digital dollar? Oh wait, what?
I think all roads lead to a new dollar…
We could put an end to the blockage in the strait of Hormuz, my god, our military could dominate the cost and inland of the cost by 100 miles and open the strait? We don’t need Iran to agree, we just do it… Since Saudi Arabia sells oil in US dollars, they are involved too, we used to have an agreement to protect Saudi Arabia for selling oil in US dollars, which just expired. I don’t know if this is the only reason why but they asked for help from the US to protect their East/West pipeline and we said no.
All of this seem to make matters worst for the dollar, I think the government knows the dollar is toast. Enter stable coin, this is digital money that can be controlled… Remember the $5000.00 Trump promised if the Republicans win the midterm, the caveat, it must be spent in the US. How the hell is he going to do that without giving everyone $5 in the new digital dollar? Oh wait, what?
I think all roads lead to a new dollar…
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Team Trump MUST break the international bankers.
Vs. The Banksters.
They are trying to damage Trump.
Meanwhile, the ancient powers... Are trying to destroy America.
As long as America can stand strong, there will be no "One World Government"
(Communism for all... For FREE!)
Yep, it makes no sense. Until you see they are raising the cost of borrowing money.
Meanwhile, Biden converted ALL of the 30 yr bonds to 3,5, and 10 yr bonds. Forcing Trump to deal with re-issuing bonds at higher rates.
Trump was right. They want US GONE. He is just in there way.
Follow these ladies:
https://www.youtube.com/watch?v=okdcl...
I think we will take part in its destruction - unfortunately its going to take meany of use with it.
Reading The Creature From Jekyll Island (long ago) explained it well, too. 👍
It is legalized theft (after the bankers had corrupted the con-gress.)
ChatGPT response:
1. What happens when a bank lends $100,000?
Assume a commercial bank approves a $100,000 loan and credits the borrower's checking account.
Bank balance sheet Change
Assets: Loan receivable +$100,000
Liabilities: Customer deposit +$100,000
Net change in bank equity $0
Notice something interesting:
The bank has created a $100,000 loan asset and a corresponding $100,000 deposit liability.
The bank's balance sheet has expanded by $100,000 on both sides. The bank has also created $100,000 in new deposit money.
However, its equity (capital) hasn't increased.
That distinction becomes important when we discuss how much additional money the bank can lend.
2. Where the 90% idea comes from
You're probably referring to the traditional fractional-reserve banking model.
Historically, textbooks commonly illustrated banking with a 10% reserve requirement:
- A customer deposits $100,000.
- The bank keeps $10,000 in reserves.
- The bank lends $90,000.
- The borrower spends the $90,000, which is deposited into another bank.
- That bank lends $81,000, and the process continues.
This describes the traditional deposit multiplier model.
However, that isn't how modern US bank lending is mechanically constrained.
Since March 2020, the Federal Reserve has maintained a 0% reserve requirement on transaction deposits.
Banks are instead constrained by capital requirements, liquidity requirements, credit risk, funding costs, profitability, and regulatory supervision.
3. Can a bank keep expanding its assets through lending?
Yes, provided it can satisfy its funding, capital, liquidity, and other constraints.
For example, suppose the bank originates three loans:
Transaction Loan assets Deposit liabilities
First loan $100,000 $100,000
Second loan $90,000 $90,000
Third loan $81,000 $81,000
Total created $271,000 $271,000
This assumes all three loans initially create deposits at the same bank and none of those deposits has yet been spent or withdrawn.
The bank hasn't multiplied an existing $100,000 asset into $271,000. Instead, it has originated $271,000 in separate loans, creating an equivalent amount of deposit liabilities.
If customers transfer those deposits to other banks, the originating bank must settle those payments using reserves or other funding arrangements.
The Federal Reserve Bank of Philadelphia explicitly describes this process of loans simultaneously creating assets and deposit liabilities.
Federal Reserve Bank of Philadelphia
4. The critical distinction: assets versus capital
Banks don't generally lend 90% of their total assets. Regulatory capital requirements are based on measures such as risk-weighted assets, and liquidity requirements operate separately.
A bank with $10 million in assets and $9 million in liabilities has $1 million in equity capital. Creating another $1 million loan doesn't create additional equity capital. It increases both assets and liabilities while potentially consuming some of the bank's remaining regulatory capital capacity.
And there's another important point: the money created by lending is extinguished when the loan principal is repaid.
the UK's central bank
The Federal Reserve confirms that US reserve requirement ratios have been zero since March 26, 2020.
Reserve Requirements
5. Why this matters economically
Your underlying observation is significant: commercial banks can expand the money supply by extending credit, without first receiving an equivalent new deposit from a saver.
That creates a relationship between credit expansion, asset prices, economic activity, and potentially inflation. Conversely, repayment and contraction of bank credit can reduce deposit money.
Limiting loan availability only to borrowers that have the best credit instead
would accomplish the same goal (assuming that is actually the goal, ha-ha)
without fanning flames of inflation in higher debt service.
But that would negatively affect the banksters ability to steal the maximum amount
from the productive.
Side effect: it would also reduce the interest cost of government borrowing
which is another siphon of wealth from taxpayers to parasites.