Obama encouraging banks to lend

[brian0918]

As we all know, the only thing stopping huge inflation from hitting is the fact that the money poofed into existence by the Fed is sitting idly on balance sheets. If that money begins to be lent out, inflation is almost definite to occur. Now Obama is calling on top banks to start widespread lending as another means of stimulating the economy. Is major inflation just around the corner? Or is this just another case of the government giving the appearance of doing one thing while actually doing another - e.g. his recent claim to foreigners that he was encouraging savings, which is obviously bogus.

http://www.google.com/hostednews/ap/articl...h1Un8QD9CJBKOO0

Edited December 14, 2009 by brian0918

[SapereAude]

As we all know, the only thing stopping huge inflation from hitting is the fact that the money poofed into existence by the Fed is sitting idly on balance sheets. If that money begins to be lent out, inflation is almost definite to occur. Now Obama is calling on top banks to start widespread lending as another means of stimulating the economy. Is major inflation just around the corner? Or is this just another case of the government giving the appearance of doing one thing while actually doing another?

http://www.google.com/hostednews/ap/articl...h1Un8QD9CJBKOO0

As a small business owner I'm pretty horrified by everything Obama wants to do to "help".

Between all expenses going up, the dollar being worth lint overseas (most of my products are imported) the looming health care mandate, local, state and county taxes being raised on businesses inflation woudl definitely put the coffin nails in.

I think we all know that Obama and his henchmen are determined to keep digging the hole deeper so the question "is this just another case of the government giving the appearance of doing one thing while actually doing another?" seems moot. Maybe he isn't really doing what he says... but if that's the case whatever he has planned is probably even worse.

[softwareNerd]

While there is some tightening of credit standards, it does to appear to be the primary driver of low credit growth. The primary driver appears to be low demand for credit. We're in a deflationary phase, where businesses (in general) aren't looking to expand, but are trying to cut their costs to meet lower revenues. Even as revenues come back, they will (in general) expand slower than the growth of that revenue. Only once businesses feel assured that revenue will grow will they seek more credit.

Of course, at any point one will be able to to line up a lot of people who have been denied bank loans, and who're complaining about it. There was one such businesswoman on the radio just now, saying how she was being denied a loan from a small bank where she sits on the board! On further questioning, she said that she used to employ 100 people (mostly seamstresses) a few years ago, but now employs only 10. No wonder the bank is wary!

The classical model where banks get money and then multiply it into loans is critically flawed, particularly when describing a fiat-money economy. Demand for credit is just as important, if not more important.

Edited December 15, 2009 by softwareNerd

[RussK]

As we all know, the only thing stopping huge inflation from hitting is the fact that the money poofed into existence by the Fed is sitting idly on balance sheets. If that money begins to be lent out, inflation is almost definite to occur. Now Obama is calling on top banks to start widespread lending as another means of stimulating the economy. Is major inflation just around the corner? Or is this just another case of the government giving the appearance of doing one thing while actually doing another - e.g. his recent claim to foreigners that he was encouraging savings, which is obviously bogus.

http://www.google.com/hostednews/ap/articl...h1Un8QD9CJBKOO0

I'm glad you pointed this out; it slipped my mind when thinking about future inflation. What I also find disturbing is the attack of the credit industry and consumerism, while at the same time these attackers advocate (or outright demand) that average Americans get back on the bandwagon of indebtedness, just when many are starting to straighten their situations out.

[C.W.]

I'm glad you pointed this out; it slipped my mind when thinking about future inflation. What I also find disturbing is the attack of the credit industry and consumerism, while at the same time these attackers advocate (or outright demand) that average Americans get back on the bandwagon of indebtedness, just when many are starting to straighten their situations out.

Banks are also trying to build up their capital and reserve accounts from the losses of the credit bubble. Even with the hand in glove position they are forced into by the Fed and the Comp of Currency, they are pretty conservative.

The one sector of the economy that has high demand for loans but has been having trouble is commercial real estate.

One thing that is so obvious and ignored is that in the same day Obama is demanding more loan activity and demanding more regulations because of risk-taking!! This nation is so blind!

[AllMenAreIslands]

Are enough people sick of this Obama clown yet? When can they boot him out for being a retard?

Ugh - everything I hear about his "plans" makes me ill, and fearful for the future.

Giving him the benefit of the doubt means concluding he's simply ignorant. Unfortunately, I think it's much more likely that he is wilfully intent on destroying America. Has anyone found proof that he's an Islamic terrorist masquerading as a United States citizen?

[Steve D'Ippolito]

We can boot him out in 2012. No sooner (except in the unlikely event of impeachment and conviction). If booted he leaves office 20 Jan 2013, and hopefully he's not replaced by something even worse.