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When will the American peopele cke in its leadership to the realization that our banking system, as a whole, is the greatest "Ponzi" scheme in existence?What most people fail to recognize is the fact that a bank considers any loan provided as an asset. The more loans it provides the greater its asset position and its greatest potential for profit. What is disturbing is the fact that these "loans" do not have to be tied to tangible assets, or have any necessary association to them.
What we have in reality is that all money in existence becomes debt. If a run on any particular bank occurs, the central bank is supposed to "bail it out". This situation works fine (just as a Ponzi scheme does) providing there is not a run on many of the banks at the same time. The problem we now have is that we are on the verge of a run on numerous banks and the banks (including the Central Bank) do not have sufficient assets (funds) to cover their obligations. In fact our government has recently planned to increase the funding level of the central banks by 300%.
It should be noted that money has no real value unless it is tied to a tangible asset and the dollar is not tied to any tangible asset. When we left the gold standard we terminated that relationship. The lack of government control and regulation of our financial industry over recent years has only accelerated the potential collapse of our banking system. I do not believe the government bailout as presently planned is sufficient to bring our banks back to a stable position.
I am disheartened to think that we have not yet seen the worst of our problems. What is needed is to tie money to some tangible asset and prevent generating so-called "virtual money," unless under strict government control and regulation. Nationalization of our banks is not needed but control is.
