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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsThe Great American Credit Collapse
The Great American Credit Collapse
By Bill Bonner, Chairman Bonner and Partners:
Please remember this warning when you go to the ATM to get cash and there is none.
While we were thinking about what was really going on with todays strange new money system, a startling thought occurred to us. Our financial system could take a surprising and catastrophic twist that almost nobody imagines, let alone anticipates.
.....(snip).....
Theres Not Enough Physical Money
Heres how and why:
Its almost seems impossible. Hard to imagine. Difficult to understand. But if you look at M2 money supply which measures coins and notes in circulation as well as bank deposits and money market accounts Americas money stock amounted to $12.6 trillion as of last month.
But there was just $1.4 trillion of physical currency in circulation about only half of which is in the US. (Nobody knows for sure.)
What we use as money today is mostly credit. It exists as zeros and ones in electronic bank accounts. We never see it. Touch it. Feel it. Count it out. Or lose it behind seat cushions.
.....(snip).....
At some point, a debt correction is inevitable. Debt expansions are always always followed by debt contractions. There is no other way. Debt cannot increase forever.
And when it happens, ZIRP and QE will not be enough to reverse the process, because they are already running at open throttle. ...........(more)
http://wolfstreet.com/2016/05/05/credit-collapse-dollar-panic/
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The Great American Credit Collapse (Original Post)
marmar
May 2016
OP
rgbecker
(4,806 posts)1. And private banks are getting 2-3% on every transaction.
It adds up quickly.
The Federal Government should take over the credit card industry and remove profits from every transaction....if you are concerned they couldn't handle the credit ratings, defaults etc. then at least just do a debit card system and do what the government says it is only allowed to do....regulate and print the only money allowed in use.
Hugin
(32,773 posts)2. I've seen some harbingers of this already.
Recently, I got a 1917 wheat penny in regular change.
Think about that a minute.
Let it soak in.
That.Should.Never.Happen.