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http://research.stlouisfed.org/fred2/series/BOGNONBR

Do we have any economists here that can explain more about this graph? It looks bad to me....

I was told by a friend that the world banking system is in much more trouble than the public knows.

Just wondering if this graph may be a little indication of it.

Basically that graph is saying that deposit have allowed thier reserves of cash be borrowed out to consumers(meaning any entity who would take a loan from the bank not just people) If i am reading it correctly then there is -100Billion USD in virtual cash out on loan to consumers.... which would be a huge problem if the default rate on those loans increases to an amount that would destabilize the lending institution.

Its been a few years since i took the economics of money and banking, but i think that sounds right.

I assume that you actively searched for this graph, so do you know what the cause is for this recent phenomenon/drop? Is this a policy that dep. insts. are currently pursuing?

5537B00B saidI assume that you actively searched for this graph, so do you know what the cause is for this recent phenomenon/drop? Is this a policy that dep. insts. are currently pursuing?

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>I believe you can blame it on deregulation, there used to be limits to how low a banks reserves could drop, there were also limits to who and how the money could be loaned, deregulation pretty much did away with the "watch dog" so the banks started to loan to nearly anyone who was breathing.

Hmm.



http://www.theonion.com/content/node/29189