What is it from?

Banks borrowed it all to make LEVERAGED purchases of DERIVATIVES which are already LEVERAGED instruments.

Actual capital — machines, production lines, materials, products — is all miniscule compared to derivatives which only exist in “virtual reality”.

Govt protects virtual wealth now.

What was the leverage based on? MBSs?

The cumulative government and trade deficits represented the spending of printed dollars. We exported our inflation and it came back to inflate our asset prices. The “foreign savings glut” came about because U.S. consumers went on a huge buying binge financed with inflation.

Why don’t more people support HR 1207, the Federal Reserve Transparency Act?

The people in this country do not become involved in the political process in a meaningful way. It’s their fault. Period.

And we don’t want to government to take over counterfeiting money. They would abuse the system even more. Imagine being able to expand government as large as you want and hiding the tax through inflation.

What is so ignorant about what you assume is that somehow if consumers got more money than there would be real investment.

Michael Hudson explains why “foreign savings glut” is a LIE.
Insane Debt-based military spending recycled or “sunk” into Real Estate. Sry 500 chr.

BIS estimates $1400 TRILLION (yes) in total Derivatives. Consumers did not spend $1400 T. Our total GDP is only $13.5 T.

Some consumers bought inflated houses. Other factors.

The “foreign savings glut” is not a lie. That is the most ridiculous thing that I have ever heard. There WAS a savings glut because we have such a large trade deficit and debt level.

Our economy is two-thirds consumer spending!!! DUH!!! This collapse was inevitable because we tried inflating out of problems instead of addressing the imbalances.

Do you have any idea how big the mortgage market is? Consumer spending is not just credit cards to buy tic tacs.

The reason the leverage factor goes up is that the arbitrage opportunities get thinner and thinner because you’ve got a lot more money you have thousands of funds, investment banks mutual funds chasing the same opportunity. The result is that the arb spreads narrow. Now, in order to get a higher return, it becomes necessary to employ greater amounts of leverage. And this is exactly what happened with LTCM back in the 1990s.

Lets go back to the 1990s, the Fed created a lot of inflation in the 1990s, what Americans did withthat money is they spent it on imported products because America lacked the industrial capacity to produce those products ourselves. So money went abroad. That kept the lid on prices, but it didnt end there. Foreigners used those dollars that we created to bid up US stocks, they invested in our stock market, that produced rising stock prices….