[MD] growth and sustainability

[Woods Woods]

[woods]
> the Fed. has been handing out billions of dollars of loans to banks


Craig:
Banks shouldn't be borrowing, they should be lending.  That's part of the problem.
Craig


woods:
  Exactly.  When banks get our money when we deposit it, somewhat similar 
to "It's a Wonderful Life" the old Jimmy Stewart movie, but more complex additions, 
such as banks make investments now, which 
all originates with depositors money.  In the movie, it was a greatly portrayed 
how when everyone ran on the bank Stewart (can't remember his characters name) 
had to explain to them that (to use made up names) Sally's money was in Bill's house 
and John's money was in Tom's new tractor, etc...  The bank loans out money to 
people via money that other people deposit.  Banks make money on interest 
paid through the loan.  Banks make investments now-a-days, as said, but I'm not educated 
in where these investments occur.  I do know with the removal of the Glass-Steagall Act 
in 1999 Investment Firms like Goldman Sachs were able to be both commercial banks 
and still remain investment firms.  This was an Act from the Great Depression era 
to stop the high risk gambling of Investment Firms from having direct impact 
on the banking system, but for some odd reasons was repealed in 1999 and look what's 
happening.
   But you do go right to the point Craig, "Banks shouldn't be borrowing, they should be lending."  
I agree.  And consumers shouldn't be borrowing, too.  We all should be saving and then buying.  I 
don't see any of this curbing.  Inflation and debt...


woods