The very last sentence of my post says just that. I don’t see lending by banks. I see huge reserves piling up on their balance sheets.
Further, I see the government rewarding banks for not lending. Consider this: When the FDIC shuts down small and regional banks, what happens? Well, the FDIC, a few days to a week before the take-under of a failing bank, shops the balance sheet of the target bank to other banks in the region who are solvent enough (in the FDIC’s opinion) to take on the job of running the target bank. The FDIC makes good on the shortfall between assets and liabilities and the bank that won the FDIC’s selection criteria gets the target bank on the cheap.
So if you want to grow your bank right now, what do you do?
You plump up your reserves well in excess of what you need, and you wait for the FDIC to call you.
Exactly. So . . . where is all the money coming from that all these posters here claim is being used to shop? To buy products? I don’t accept that it’s ALL credit. Quite the contrary, most other evidence says people are saving more and spending less.