Our banking system

[harflimon]

http://benbittrolff.blogspot.com/2008/01/r...y-bernanke.html

NEGATIVE BANK RESERVES ;

The banks are busted.



In the first graph (Total borrowings of Depository Institutions from the Federal Reserve) shows that the banks are capital impaired” and borrowing at a rate unprecedented in history.



The second graph (Non borrowed reserves from of Depository Institutions) shows that the capital that the banks do have is quickly being depleted.



The third graph (Net Free or borrowed reserves of Depository Institutions) is best summed up by econo-blogger Mike Shedlock who says: Banks in aggregate have now burnt through all of their capital and are forced to borrow reserves from the Fed in order to keep lending. Total reserves for two weeks ending January 16 are $39.98 billion. Inquiring minds are no doubt wondering where $40 billion came from. The answer is the Fed’s Term Auction Facility. (Mish’s Global Economic Trend Analysis; http://globaleconomicanalysis.blogspot.com/ ) So the only reserves they have is capital they borrowed from the Fed.



The fourth Fed graph illustrates the steep trajectory of the ever-expanding money supply. (Monetary base)
A careful review of these graphs should convince even the most hardened skeptic that the banking system is basically underwater and insolvent. We are entering uncharted waters. The sudden and shocking depletion of bank reserves is due to the huge losses inflicted by the meltdown in subprime loans and other similar structured investments.

There’s more words at the link discussing this, but I think the graphs pretty much say it all. Our banking system is insolvent.

[icosaface]

The banking system is not insolvent, it would have had to be solvent to be insolvent! The banking system is a scam. The federal reserve lends money it doesn't have to governments and banks and then requires them to pay back the amount which was fraudulently lent plus interest on money which never existed in the first place. The emperor's clothes are finally being seen for what they are, namely non existent.

[harflimon]

Yea, but they don't even have any of their fake money left, they are printing new money left and right to try and replenish it, as the graphs show.

[icosaface]

No, the US government prints the money, that is the only money that the government brings into existence by it self. The banks money is all bookkeeping entries. The Fed does not print any paper money or mint any coins.

[flatron]

deserved a bump

[harflimon]

I used the "printing money" comment colliqually. I know they don't actually print it, but it exists just as if they did.