MayorQuimby
Member
- Feb 4, 2024
- 82
- 47
- 21
I came across an article on Druthers.ca, an independent, people-powered newspaper. This newspaper is based in Canada, however many of its articles have relevancy to the United States.
I will quote an excerpt of the article that caught my eyes, to see what you guys think of it. I have also included the link to the original article at the bottom of the post.
Let me know what you think.
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While many are grumbling loudly about the cost of everyday items and worrying about the national debt, another crisis is brewing. Commercial banks are sitting on trillions of dollars of unsustainable private debt. In recent years, the commercial banks have been able to issue new credit almost without limit in what is known as the 0% reserve system. Now they are scrambling to meet increased capital requirements. As the economy tightens, the banks are in a precarious position. From January 2020 to December 2021, we witnessed a frenzy of Quantitative Easing (QE). Quantitative easing is a monetary policy action whereby a central bank purchases predetermined amounts of government bonds or other financial assets in order to stimulate economic activity. But as interest rates rise, credit conditions are tightening private sector banking money creation. Diminished earnings are taking a toll on stock prices including bank stocks, and no surprise, no one in the media is mentioning it. The strongest Canadian banks at the moment are Royal Bank, National Bank then BMO and TD. Both CIBC and Scotiabank are carrying the heaviest debt loads according to current data.
This sounds risky but it gets even worse. As interest rates rise, loan failures could trigger a major derivatives crisis; as happened in 2007/8 during the sub-prime mortgage fiasco. Last time, a big tax-payer funded bail-out occurred, and those who recklessly gambled money away were never punished. Maybe the banks learned a lesson at least, you may think. Unfortunately, they did not learn; they have continued with their high-risk derivative trading, and their exposure today is at least 5 times higher than it was in 2007 according to the Office of the Comptroller of the Currency (OCC) in the United States.
The movie The Big Short is a must watch to understand how this all happened. The fall-out here from the current financial fiasco could — and likely will — be much worse, as it is combined with all the other fiascos being perpetrated on Canadians, such as: higher and higher taxes including the ridiculous carbon tax; wild inflation, soaring food prices and supply chain issues in many sectors causing increased bankruptcies along with attempts to bring in increased totalitarian controls including the Digital ID.
Did you know that legislation was introduced years ago to allow for “bail-Ins” in future, rather than bailouts? What does that mean you ask? Anyone with a bank deposit, legally speaking, is now considered an ‘unsecured creditor’ of the bank, and the savings of depositors can be confiscated to fix shaky balance sheets. This is of concern to all of us who have families to feed and bills to pay and need to trust that our savings are protected by the CDIC (Canadian Deposit Insurance Corporation).
Is it too late to stop the collapse? According to my recent Podcast guest, David Ward, former Bond Trader and Financial Commentator, Canada must reform its banking system regardless of what happens this year or in the future although a collapse is likely. The commercial banks have demonstrated that they will not reform of their own accord, and sooner or later, their greed will bring about a total implosion of our current financial system. Will we return to a full reserve system or create legislation like the Glass-Steagall Act (which was established in the wake of the 1929 stock market crash) to separate investment and commercial banking activities to protect us from corruption and fraud? How can we reform our monetary system?
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Link: Is This a Controlled Demolition of Our Banking System to Set Up For a Central Bank Digital Currency As The “Solution”?
If the link doesn't work, just go to Druthers.ca, then go to Read, then go to By subject, then go to Categories, and finally go to Finances. The articled is titled: Is This a Controlled Demolition of Our Banking System to Set Up For a Central Bank Digital Currency As The “Solution”?
I will quote an excerpt of the article that caught my eyes, to see what you guys think of it. I have also included the link to the original article at the bottom of the post.
Let me know what you think.
****
While many are grumbling loudly about the cost of everyday items and worrying about the national debt, another crisis is brewing. Commercial banks are sitting on trillions of dollars of unsustainable private debt. In recent years, the commercial banks have been able to issue new credit almost without limit in what is known as the 0% reserve system. Now they are scrambling to meet increased capital requirements. As the economy tightens, the banks are in a precarious position. From January 2020 to December 2021, we witnessed a frenzy of Quantitative Easing (QE). Quantitative easing is a monetary policy action whereby a central bank purchases predetermined amounts of government bonds or other financial assets in order to stimulate economic activity. But as interest rates rise, credit conditions are tightening private sector banking money creation. Diminished earnings are taking a toll on stock prices including bank stocks, and no surprise, no one in the media is mentioning it. The strongest Canadian banks at the moment are Royal Bank, National Bank then BMO and TD. Both CIBC and Scotiabank are carrying the heaviest debt loads according to current data.
This sounds risky but it gets even worse. As interest rates rise, loan failures could trigger a major derivatives crisis; as happened in 2007/8 during the sub-prime mortgage fiasco. Last time, a big tax-payer funded bail-out occurred, and those who recklessly gambled money away were never punished. Maybe the banks learned a lesson at least, you may think. Unfortunately, they did not learn; they have continued with their high-risk derivative trading, and their exposure today is at least 5 times higher than it was in 2007 according to the Office of the Comptroller of the Currency (OCC) in the United States.
The movie The Big Short is a must watch to understand how this all happened. The fall-out here from the current financial fiasco could — and likely will — be much worse, as it is combined with all the other fiascos being perpetrated on Canadians, such as: higher and higher taxes including the ridiculous carbon tax; wild inflation, soaring food prices and supply chain issues in many sectors causing increased bankruptcies along with attempts to bring in increased totalitarian controls including the Digital ID.
Did you know that legislation was introduced years ago to allow for “bail-Ins” in future, rather than bailouts? What does that mean you ask? Anyone with a bank deposit, legally speaking, is now considered an ‘unsecured creditor’ of the bank, and the savings of depositors can be confiscated to fix shaky balance sheets. This is of concern to all of us who have families to feed and bills to pay and need to trust that our savings are protected by the CDIC (Canadian Deposit Insurance Corporation).
Is it too late to stop the collapse? According to my recent Podcast guest, David Ward, former Bond Trader and Financial Commentator, Canada must reform its banking system regardless of what happens this year or in the future although a collapse is likely. The commercial banks have demonstrated that they will not reform of their own accord, and sooner or later, their greed will bring about a total implosion of our current financial system. Will we return to a full reserve system or create legislation like the Glass-Steagall Act (which was established in the wake of the 1929 stock market crash) to separate investment and commercial banking activities to protect us from corruption and fraud? How can we reform our monetary system?
****
Link: Is This a Controlled Demolition of Our Banking System to Set Up For a Central Bank Digital Currency As The “Solution”?
If the link doesn't work, just go to Druthers.ca, then go to Read, then go to By subject, then go to Categories, and finally go to Finances. The articled is titled: Is This a Controlled Demolition of Our Banking System to Set Up For a Central Bank Digital Currency As The “Solution”?
