Virtual money?

drbeat

!!!!!!? wrote: »

In a nutshell, the problem arose because the greed of the banks was allowed to go unchecked by the governments and their financial regulatory authorities. More money was created than was sensible, it's not all going to be paid back and hence many banks stand to go bust. Being as enormously leveraged as they are that's very bad news indeed as it implies the destruction of large amounts of capital.

All it takes is a run on a large bank and it'll be game over! If savers lose confidence then the !!!!!! will truly hit the fan!

drbeat

!!!!!!? wrote: »

In a nutshell, the problem arose because the greed of the banks was allowed to go unchecked by the governments...

!!!!!!, don't forget:

Estate Agents
Surveyors
Solicitors
Mortgage Advisors that participated in mortgage fraud
BTL Wannabes
The "things can only get better", "they won't let it happen", "prices only go up", "it's different this time" and "must get on the property ladder know matter what" brigade

I'm sure there is more.

penguine

drbeat wrote: »

All it takes is a run on a large bank and it'll be game over! If savers lose confidence then the !!!!!! will truly hit the fan!

Which is why the government had to step in to reassure us that they wouldn't let any banks go under and that all savers' deposits were protected.

lynzpower

If savers lose confidence then the !!!!!! will truly hit the fan!

heres one saver who has lost all confidence :wave:

bo_drinker

So will things ever get back to "normal" whatever that may be ?????????? As virtual money doesn't seem "normal".

If the banks were allowed to crash then what would have happened, savers would have lost their hard earned. :eek: :eek:

PasturesNew

lynzpower wrote: »

heres one saver who has lost all confidence :wave:

And here's one that's lost nearly all interest income ... gone from "can afford to live" to "it doesn't even pay the rent" as rates plummeted to support the plasma TV class.

wannasavemoney

Would it have been cheaper for the taxpayer via useless government to have just guaranteed peoples deposits and mortgages and let the banks fend for themselves with the rest of the !!!!!! they had created? At least then the useless banks would have paid for their mismanagement instead of all of us paying for their fat salaried mis management?

shaven-monkey

If a bank is allowed to die, the debts are bought by another bank with liquidity.
The new holder of the debt changes the terms of the debt to provide a better return.
All your house are belong to them.

bo_drinker

Bump this back to the top. Will things be normal whatever that is in our lifetime ?? I can't see it because if it wasn't there in the first place where are we heading.

mewbie_2

PasturesNew wrote: »

fractional banking for dummies

Thanks PN. Although I have pretended in the past to understand this, I really cannot be @rsed to look at links / videos / read pompous crap from self called 'experts' on this subject. But I found your explanation interesting and informative. And mercifully short on technical terms and. er. fairly short.