Bank reserves in the U.S. turned negative in January for the first time since the Great Depression. {Jesus Christ! Why Isn't CNBC talking About This! MY GOD!}
In December 2007, total bank borrowing from the Fed topped 36% of reserves. That was the highest proportion since March 1933, when it hit 46%. Back then, President Roosevelt declared a "bank holiday" to prevent bank runs.
But…“In January 2008,” writes our friend John Williams of Shadowstats.com, “the U.S. banking system met its reserves only by borrowing an amount in excess of 100% of reserves:
“Mr. Bernanke has promised not to repeat the mistakes made by the Federal Reserve in the 1930s,” Williams explains, “whereby the banking system and the money supply collapsed into a deepening, deflationary Great Depression.
“The latest data on bank reserves suggest that something along the lines of an attempted nonrepeat of 1933 is under way. Faced with a devil’s choice, the Fed has acted in the last several months with a series of emergency actions to hold the banking system together and to prevent a debilitating implosion in the money supply. The Fed will create whatever money is needed to prevent a collapse of any portion of the financial system.”
That can’t be good…
In December 2007, total bank borrowing from the Fed topped 36% of reserves. That was the highest proportion since March 1933, when it hit 46%. Back then, President Roosevelt declared a "bank holiday" to prevent bank runs.
But…“In January 2008,” writes our friend John Williams of Shadowstats.com, “the U.S. banking system met its reserves only by borrowing an amount in excess of 100% of reserves:
“Mr. Bernanke has promised not to repeat the mistakes made by the Federal Reserve in the 1930s,” Williams explains, “whereby the banking system and the money supply collapsed into a deepening, deflationary Great Depression.
“The latest data on bank reserves suggest that something along the lines of an attempted nonrepeat of 1933 is under way. Faced with a devil’s choice, the Fed has acted in the last several months with a series of emergency actions to hold the banking system together and to prevent a debilitating implosion in the money supply. The Fed will create whatever money is needed to prevent a collapse of any portion of the financial system.”
That can’t be good…
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