Leonidas
pre 15 godina
The $700 billion bailout will not solve the banking crisis.This is not a crisis of liquidity but a crisis of insolvency.
Because of their criminal lending practices the banks know they're insolvent and therefore any bank could go bust at anytime.
Most of the banks incresed their lending-savings ratios to 9:1 assuming that all depositors won't withdraw their depositssimultaneously.
The extra lending went to securitised mortgages and paper backed debt with false real values attached to them.
Therefore,balance sheets were inflated with false values which precipitated the present crisis.
This is not going to be a quick fix as some people are led to believe.It's going to be a long painfull process for most people but it will also lead to the emergence of new leaders on the world stage.
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