Comments on: Cue The Twilight Zone Theme

By: Bryan

Bryan — Fri, 12 Aug 2011 18:17:52 +0000

At this point we can all wonder how long the Bank of America is going to continue to exist, because it isn’t even fooling Wall Street now.

Yeah, they are about to stop issuing checks for Social Security. If you don’t arrange for direct deposit you will receive a debit card with outrageous fees attached. More ‘rent’ for the financial class, and another attack on the poor.

By: Badtux

Badtux — Fri, 12 Aug 2011 16:03:45 +0000

The problem with T-bills as cash is that they are no longer issued in physical form as bearer bonds (ostensibly to “prevent tax evasion”, but in actuality to force money used for conducting large transactions into the banking system), so the exchange of “currency” for real assets if you wish to purchase something with them becomes… difficult. Of course, hauling bales of $100 bills isn’t much better there, so… (shrug).

Our ruling elite have tried to set things up so all money has to go through banks in order to conduct any transaction of any significant scale, and have largely succeeded at that. This works okay when the banks are healthy and doing what they’re supposed to do. With today’s dysfunctional banks… not so well.

– Badtux the Monetary Penguin

By: Bryan

Bryan — Fri, 12 Aug 2011 05:12:02 +0000

Or they will shift to $10K and $100K T-Bills as a more convenient form of ‘cash’. The reality is that fiat currency is nothing more than a bond without interest. It only works because people accept it in exchange for real assets.

Yep, we are in a deflationary feedback loop, and Very Serious People are worried about inflation.

By: Badtux

Badtux — Fri, 12 Aug 2011 04:56:15 +0000

Banks aren’t lending, so it does cost them money to accept deposits, since they’re not earning any money on the deposits from interest from loaning them out. This is yet another sign that we’re entering another deflationary cycle, since banks have now become high-tech mattresses and the money deposited into them has become modern-day mattress money, doing nothing to create economic activity, just creating lumpy accounting book entries.

My guess: A *lot* of $100 bills are going to be demanded. And sales of large walk-in safe installations are going to skyrocket in tony districts of various locales.

– Badtux the Deflationary Penguin