Fractional Reserve Banking: Fed Drops the Reserve Requirement to ... Zero. (loans, real estate)

[Elliott_CA]

You read that right. Fed has dropped the required reserves entirely:

https://www.federalreserve.gov/newse...y20200315b.htm

Banks now have a free hand to create an infinite amount of digital loan money. "This action eliminates reserve requirements for thousands of depository institutions and will help to support lending to households and businesses." Only have $10 mil in deposits but want to hand out $200 mil in credit? Go for it! What could go wrong?

[Lycanmaster]

Hyper-inflation here we come !

[Lowexpectations]

Originally Posted by Lycanmaster

Hyper-inflation here we come !

It didn’t happen the last go round

[mitchmiller9]

I think the Fed did this to get more liquidity into the repo markets.

[Returning2USA]

Originally Posted by Elliott_CA

You read that right. Fed has dropped the required reserves entirely:

https://www.federalreserve.gov/newse...y20200315b.htm

Banks now have a free hand to create an infinite amount of digital loan money. "This action eliminates reserve requirements for thousands of depository institutions and will help to support lending to households and businesses." Only have $10 mil in deposits but want to hand out $200 mil in credit? Go for it! What could go wrong?

More stupid.

Not surprised.

[Threerun]

The Dodd-Frank Act didn’t go away as a result of the Fed’s move.

Liquidity requirements for institutions didn’t ‘magically’ disappear, despite Republicans attempts in 2017.

[Taggerung]

Originally Posted by Lowexpectations

It didn’t happen the last go round

This time we're going to get all the inflation we should have had from the last time, plus much more.

[Wolverine607]

Nothing at all learned from 2008. Not a thing. Just more modifications and band aids to patch up a debt credit ridden bubble!!

Simply disgusting.

Even subprime mortgages are back but under a different name: https://fee.org/articles/subprime-lo...ing-from-2008/

I have heard some arguments that it would have been too painful for the American people if the government did not enable these things again. Like really how. For the greedy wallstreet bankers or for the greedy ones hoarding investment properties at the expense of today's home buyers and future generations who actually will save money by making real estate prices in the stratosphere in most of America and beyond the exosphere in places like California, Seattle, DC, Boston, NYC metro areas? Oh yeah it would have been so painful and bad if they required 20% down with normal 6-8% interest rates from 2011-2012 to present with the elimination of bad loans. And would have been a good thing if home prices stayed at those levels.

But oh yeah it would have been so painful for the economy for prices not to rebound to insanely high levels dorks (sarcasm *10).

[TaiChiMaster]

I think the elites are short and trying to tank the economy and the market.

[Elliott_CA]

Originally Posted by Threerun

The Dodd-Frank Act didn’t go away as a result of the Fed’s move.

Fed approves rules loosening Dodd-Frank bank restrictions (October 2019)