As if the United States debt woes weren’t dire enough already, now Ben Bernanke and his evil henchmen are planning to eliminate reserve requirements in the banking system. Let’s be clear about what this means: the United States government has been borrowing its way out of every single crisis for 100 years. Now we are up to our eyeballs in debt — levels never before seen in history, speaking in real terms. More currency is being printed than ever in history. Interest rates are being kept artificially at historical lows. Banks — encouraged by the government — lent trillions of dollars to people who couldn’t afford to buy homes. A bubble formed because of artificial demand created by the government.
Now this same government, in an attempt to stimulate lending (again), is encouraging banks to leverage themselves 100%. The absurdity is stupefying. I’m absolutely floored that the Chairman of the Federal Reserve actually proposed ending fractional reserve banking. We have entered a new era, indeed…
