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« on: September 15, 2011, 02:46:27 pm »
You would not believe the things banks are allowed to do. You know if you put 10 dollars in your bank account, the bank can LEGALLY lend out 100 dollars, using that 10 dollars as the "backing" for their lending. And that's not even considered dodgy, that's standard practice of fractional reserve banking. Let me tell you a story about your 10 dollars. You know that 90 'magic' dollars the bank just created there? Well since they have claim to stuff people bought with lending, they have 'magic' hypothetical assets too! Hey that's just as good as money, we can back more loans with that too, so now that 10 dollars is 'backing' 200 dollars. Hey you know we can take that 200 dollars and let's turn it into a financial product and float it on the stock market, so speculators can balloon that up to 400 dollars.
The thing is, there are only 10 fucking dollars! And you know what? This isn't even as crazy as the credit default swaps. You know that 400 dollar financial product? The fact that it was so crazy and insane and risky was leveraged for cash! They sold the RISK as a financial product, of equal value! That 10 dollars in your savings account was backing like 800 dollars!
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