Banks will not be loaning money.

[peilthetraveler]

Quote from PocketChange:

Street Food is at the common denominated currency through out the world.

A Hot dog in NYC is $3
A Shwarma in Amsterdam is 3 Eur
road side tacos in Mexico is 3 Pesos
A crepe on the street of Paris is $3 Eur
Samosa's on the beaches of Mumbai are 3 Rupees.

Doesn't much matter what the exchange rates are cheap street eats are always a few local bucks.

I suppose cigarettes and beer are equally priced in common coin.

I have had those road side tacos in mexico (although they costs 2.5 pesos when i was there in 2005.) They are so tiny, you really have to order 8 to 10 of them to fill you up. I dont even think eatting one would be enough to fill up the belly of a 2 year old.

 

[ashatet]

I think credit will never go out of fashion. If people were not to get credit, no new businesses will come out since only the people who alreday have the capital will be able to come up with new businesses, and we all know that people who have already have made a lot of money have little incentive to create new and dynamic businesses.

Quote from PocketChange:

Changes in the financial regulations of banks specifically abolishing previous restrictions from using deposits for speculative investments will make loaning money obsolete and unprofitable.

As part of TARP and the financial recovery acts passed last year, bank holding companies are no longer restricted from using deposited funds to trade. Furthermore, the FDIC is insuring their bets.

If you are a trader/banker with access to deposited funds at a cost of 3% a year and the additional benefit of the FDIC insuring your losses.

Would you

A: Use the deposited funds to loan money out at prime + 2%-5%.

or

B: Use the deposited funds and trade large with no risk?

The bankers are going to make a fortune either way and the ones that blow out will be on the FDIC's dime.