Some things never change

With the current fake credit crisis heading close to becoming full swing, now would be a good time for a little history lesson:

"In March 1929 there was a little meeting in New York. After that meeting, Bernard Baruch sells out [of stocks], the Rockefellers sell out, the Kennedys sell out, all of the big bankers sell out. The big people were out [of the stock market] by August. Then the Federal Reserve cut the money supply four times in a month. There were four drastic reductions in the money supply.

"Then one day in October the banks called all of their loans on all of their margins at the same minute. Every bank in the money desk - and these were call loans, callable on demand. People had their stock on margin, borrowing 90%. Now they went to the banks and the banks weren't lending, they were calling. They run to the market and everyone's trying to sell. The banks had shut the money off. The call desks were closed. The money desk shut down....and all these people were running around trying to sell because they had to sell 10% down and they were wiped out. All of the people who weren't on the inside were gone."

Some things never change, it would seem.

Now a little economic lesson:

The economy grows when the banks lend more money into circulation than is needed simply to repay the loans already lent + interest on those loans.

The economy shrinks when the banks stop lending as much as is needed to repay the loans + interest.

The state of the economy is entirely down to the banks. Simple really.

Remember this when your home/business is being repossessed/foreclosed. Then you know who really is to blame!