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The Forum > General Discussion > What no one ever tells you about your debts.

What no one ever tells you about your debts.

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Ref,

You make Aiden look like a genius.
Posted by ttbn, Tuesday, 3 May 2016 11:28:47 PM
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Shadow,

Far from being suicide, the Reserve Bank printing money would not be harmful. The Reserve Bank pays commercial banks interest on reserves, so functionally it's no different from borrowing from the bond market; the government is putting money into circulation and paying interest to take it out of circulation again.

Attempting to fund large foreign currency repayments by printing money and selling it to buy foreign money would be "sheer suicide" but nobody is suggesting we do that. Australia only borrows in Australian dollars.

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Referundemdrivensocienty,

"There are no laws in any country that limit the amount of money banks can or cannot create."
No absolute limit, but there are the Basel III capital requirements.

There don't actually need to be laws limiting the amount of money banks can or can't create, because the banks are limited by what they (and their customers) can do profitably. Central banks effectively control interest rates, and the higher the rates are, the less likely it is that an investment will be profitable.
Posted by Aidan, Wednesday, 4 May 2016 12:39:18 PM
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I was listening to this week's 4 corners program on bank.

I remember, pretty well 100% sure...
One comment stated by Stephen Long was that over stating loan borrowers income. Stephen Long said banks are trying to get Mood's or S$P (forgot which one) ratings agencies' triple A ratings to allow banks to bundle up housing mortgages into securities, to sell off the bundled up mortgages.

Sound very Sub-prime to me. Scary stories, what will they think of next.

My theory would be banks are trying to maximise borrowers debt before the crash, sending borrowers into something similar to the last 8 years of Greece's depression.

I also tend to believe Australian federal election is being gotten out of the way before the 3rd quarter market decline.

Markets and media get to blame part of the reason for a major market slump on Donald Trump. Republicans and Democrats using Donald Trump to distance themselves from political the blame.

Stephen Long's website's many banking investigations.
http://www.abc.net.au/news/stephen-long/167162
Posted by steve101, Friday, 6 May 2016 3:22:09 PM
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