Quote from Capablanca:
You can print all the money in the world but if people are not productively employed it will all be for naught. Goods and services people. Goods and services.
Giving money to the people directly is not a permanent solution. The problem is the financial system is broken. The water pump is broken. Have you ever tried going through a day without running water? Try and you'll soon realize you cannot be very productive without it. The government can ship a whole lot of bottled water to the people but when it runs out you still have a broken pump and no water coming through.
That analogy is wrong. Sorry.
Roughly half US banks are insolvent.
The others are fine.
The good banks have money to lend - but won't - because the bad banks control the bulk of credit that enters the market.
In order for the economy to recover, lending must resume - predominately, from the Bad Banks.
The Bad Banks won't lend because they're hoarding cash to forgo impending bankruptcy.
And the Good Banks won't lend because the broader economic recovery is dependent on Bad Banks (who won't lend).
The system is not "broken", per se.
More like, the system is "Seized up" with crap.
To unclog the pipes, the shitty (Citi) Banks need to get flushed.
All the Crap Banks need to go under.
Then Good Banks will lend as they control the dominate share of credit that enters the market and can be sure their self-motivated actions will lead to a recovering economy, and asset values on which their loans will be made.
So its really just a case of letting the Shit Banks go under, and the Good Banks rise up and take their place.
There was a term people used for this not too long ago. Its on the tip of my tongue....Creative, something. Oh yea:
CREATIVE DESTRUCTION
People say that type of Darwinian Capitalism is what made America Great. Imagine that?! On a trading board, no less.
Why do I get the impression 98% of the posters on here listen to those idiots at CNBC all day??!?!?
