Crash Course Super Smart Democracy #PeoplePower






Have the risk weights used in current bank regulations really been approved by the US Congress, in accordance to the Constitution?

Note: When reading about “bank capital requirements”, know that you are reading about “bank equity requirements” or about “bank shareholders’ skin-in-the game requirements

The confession that shall not be heard

Assets for which bank capital requirements were nonexistent, were what had most political support: sovereign credits. A simple ‘leverage ratio’ discouraged holdings of low-return government securities” Paul Volcker

New foreword, January 2021: For about 600 years banks allocated credit based on risk adjusted interest rates. After risk weighted capital requirements were introduced, 1988 Basel I, they began allocating it based on risk adjusted returns on equity.

Lower bank capital requirements when lending to the government than when lending to citizens, de facto implies bureaucrats know better what to do with credit they’re not personally responsible for than e.g. entrepreneurs

Lower bank capital requirements for banks when financing the central government than when financing local governments, de facto implies federal bureaucrats know much better what to do with credit than local bureaucrats.

Lower bank capital requirements for banks when financing residential mortgages, de facto implies that those buying a house are more important for the economy than, e.g. small businesses and entrepreneurs.

Lower bank capital requirements for banks when financing the “safer” present than when financing the “riskier” future, de facto implies placing a reverse mortgage on the current economy and giving up on our grandchildren’s future.

Those bank capital requirements, de facto ruled that those less creditworthy were even less worthy of credit, and that those more creditworthy were even more worthy of credit.

Can this really be in accordance with the U.S. Constitution? Is it not a Shadow-Insurrection?

Is a debt-riddled economic system capitalism?

Over the last fifteen years, various unelected groups have destroyed capitalism with more success than the USSR ever managed during 70 years of trying. It’s a special kind of mentality that hogs all the money, mechanises and robotises until there’s not enough work, and then accuses those on the scrapheap of being “useless”.

Here’s a little opener to simplify both the British and general fisco-economic situation. (Don’t be fooled into thinking it’s simplistic).

I wrote this in March 2011: ‘Western economies showing little or no growth are left with just one way to defend the credibility of their currencies: higher interest rates.’ One big problem with that: people will buy into your currency for the higher interest (observe the recent climb in Sterling’s exchange rate against the $ over the last six months at a whopping 11.37%) but it holds back your exports because it makes UK products more expensive. Catch 22 with all floating currencies.

Is a debt-riddled economic system capitalism?

Author: rogerglewis

Real Estate Entrepreneur. http://www.realrld.com/

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