FRB is the practice of banking that allows a bank to lend out nearly all of its liquid assets. Which is OK IF that would be the extent of the ordeal...
However when you add in the fudging allowed on PAR numbers (PAR is the valuation of financial assets)
For instance bank stocks used to valued at .01 dollars per share for the purposes of determining lending ability. While Corporate bonds were valued at 1000 each.
BUT the FED is allowing some banks to fudge those par numbers, allowing them to literally MAKE money with a few accounting tricks.
Its not good. Am I saying we should scrap our present system? No. I am saying our present system is much like the situation P.J. O'Rourke described when he talked about giving money and power to Government, was like giving liquor and car keys to teenage boys.
Giving that sort of unrestricted money making (expansion) capabilities to a handful of unelected people is madness. Especially since they do so in the shadows.
If a bank has $100 in stock, they can loan out $100?
While Corporate bonds were valued at 1000 each.
If a bond is worth $1000, it's valued at $1000. What does that have to do with banking or lending?
Giving that sort of unrestricted money making (expansion) capabilities to a handful of unelected people is madness.
Which people? Bankers? Depositors? Lenders?