Is this where all the money is coming from?

[godoftrading]

Bloomberg.com: Worldwide

"Banks' borrowing at the rate climbed to a daily average of $13.9 billion in the week ended July 16 from $7.84 billion three months earlier."

So currently banks are borrowing about $417 billion per month from the Fed? Where did the Fed get trillions of dollars to makes these loans?

If this rate of borrowing continues for the next 6 months will they will borrow 2.5 trillion? Against what assets?

Is this the biggest money give-away of all time? (and completely illegal/unethical as well)

If this money keeps flowing we should see massive inflation soon. Perhaps this is why the Fed stopped reporting M3 and why the CPI has been monkeyed with so much.

What do you guys think?

 

[Rhody Trader]

Bloomberg.com: Worldwide

"Banks' borrowing at the rate climbed to a daily average of $13.9 billion in the week ended July 16 from $7.84 billion three months earlier."

So currently banks are borrowing about $417 billion per month from the Fed? Where did the Fed get trillions of dollars to makes these loans?

If this rate of borrowing continues for the next 6 months will they will borrow 2.5 trillion? Against what assets?

Is this the biggest money give-away of all time? (and completely illegal/unethical as well)

If this money keeps flowing we should see massive inflation soon. Perhaps this is why the Fed stopped reporting M3 and why the CPI has been monkeyed with so much.

What do you guys think?

I think you are severely miss-reading the data. You cannot add up the average daily borrowing to get a monthly figure. Nor can you take a monthly figure and add that up for some longer timeframe total. These loans are generally short-term in nature. Sometimes they are just overnight. That means they are constantly rolling off.

Secondly, this is not banks coming to the Fed and saying please give us some money. The banks are required to put up collateral. In many cases the Fed won't even lend the full amount of that colateral because of its relatively poor quality. That means at best the same value of assets remain in the system at all times, and really it's generally less asset value in the system.

What the Fed is doing right now with this lending is increasing liquidity which is not the same as increasing money supply.

 

[davedavethetrader]

however, we are still all well and truly f.....

tulips, railways, internet, credit. you get the picture.

i wonder what the historical name will be. will the credit crunch stick? or will it change to something like the credit implosion. credit catastrophy, the great bank bust, debt to dust. or simply the time when money was so cheap for so long that the banks forgot that it actually needed to be paid back for them to actually make a profit, instead of to just lend more and book a profit!

the only thing that might save us is world plc's amazing ability to continue to grow.

also, how great is america?! if you lose money, just sue! genius.